The governor of the Bank of Thailand said Friday the central bank will remove the controversial capital controls on short-term capital inflows effective March 3.
Removal of the controls is justified by several factors, including a strengthening economy and a greater balance in the foreign exchange market, Tarisa Watanagase told a press conference.The central bank implemented a one-year, 30 per cent withholding requirement on many types of capital inflows in December 2006, in part to help maintain the competitiveness of Thai exports by restraining the value of the baht.
But the immediate effect of the measure was to trigger a massive sell-off on the Thai stock market, and critics charged that the measure discouraged foreign investment.
The reversal was announced just one day after ex-prime minister Thaksin Shinawatra returned home Thursday morning, ending nearly one and a half years of self-imposed exile.
Finance Minister Surapong Suebwonglee said Thursday afternoon that he might consult with Thaksin on the capital controls.
Speculation that the controls would be scrapped have already pushed the baht higher this week. The unit closed Friday at 31.96-98 baht to the dollar.
(Nation)
What a roller coaster ! Before the announcement, exchange rate THB/USD was at 31,86. A few minutes later, the THB shot up at 31,20 !
Almost 3 weeks ago, the central bank was reluctant to remove the 30 % withholding requirement… And even had “secret datas” to give to the new finance minister.
“If the ministry receives more information, it may not waive the requirement because of the negative impact which could occur thereafter, said Mrs Pongpen.“, a senior member of the BOT.
Meanwhile, Miss Tarisa, BOT’s boss, stays right in her boots : “I will not quit, because I am a working person. I insisted it would continue to work. I have not been pressured as reported. We considered it was time to remove supporting measures“. (Nation)
Sure. No pressures at all. Today was a good time. And three weeks ago, it wasn’t.
Maybe it’s something related to astrology ?;-)
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