Baht hits new high as market readies for capital controls end

BANGKOK, Feb 29 (TNA) – The Thai baht hit a new high again in Thursday's trading session because there is an expectation in the market that the central bank will scrap the 30 per cent reserve requirement, according to Bank of Thailand Governor Tarisa Watanagase.

She said the baht strengthened and broke through 31.99 to the US dollar compared with a range of 32.085-32.105 to the dollar on Wednesday, it's strongest level in 10 and a half years.

Mrs. Tarisa attributed the continued baht rise to the market expectation that BoT would call off the reserve withholding measure.

However, she said, the local currency had strengthened in conjunction with other regional markets.

The previous government imposed currency controls in December 2006 in an attempt to halt the baht's rapid rise against the dollar. The measure caused the biggest single-day drop in the Thai stock market in late 2006, with losses worth 203 billion dollars. Relaxations have since been made to the currency rules.

Mrs. Tarisa said should anyone want to know whether the central bank had intervened in the baht movement for now, they could see data on the country's international reserve through the website of the bank.

She reiterated the bank's supervision and management policies would remain unchanged.
Regarding a comment by the Securities and Exchange Commission (SEC) that the BoT is indecisive and uncertain in the scrapping of the capital controls, she said it is a difference of perspectives.

However, she reasserted that what the central bank would do must benefit all parties. (TNA)-E005

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