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Foreign Exchange for Expats in Thailand

Submitted: August 2014

Thailand’s official currency is the Thai Baht (THB). Its symbol is ฿. The Bank of Thailand is responsible for monetary policy.

Thailand does impose some exchange controls under the Exchange Control Act (B.E. 2485) and Ministerial Regulation No. 13 (B.E. 2497). While the exchange controls are not the strictest ever seen in history, they can be quite a bitter pill for expats in Thailand.

If you come from China, Vietnam, Malaysia or Myanmar, you might wish to check if you’re better off exchanging currency in Thailand or in your home country.

 

Exchange controls

Foreign exchange transactions must be performed through authorised agents only. Foreign currency can be purchased from authorised agents only if there is a good reason for it. For expats resident in Thailand, this may include:

  • Educational expenses abroad
  • Travel expenses
  • Payment of any documented debt in foreign currency – proof of inward remittance into Thailand will be required for loan repayments
  • Direct investment abroad, i.e. where the participation is 10% or more – this can be an equity investment or a loan
  • Share purchases abroad under an employee share scheme (up to USD1m per year)
  • Overseas property investment up to USD10m per year.

Direct investment abroad can be made only in foreign currency, unless the investment is made in Myanmar, Laos, Cambodia, Malaysia, or Vietnam. Portfolio investment abroad can only be made through mutual funds approved by the Thai Securities and Exchange Commission (SEC).

 

Remitting foreign currency into Thailand

There are no restrictions on the amount of foreign currency you can take into Thailand. However, the Foreign Exchange Regulations provide that “any person receiving foreign currencies from abroad is required to repatriate such funds immediately”.

A remittance can be made by exchanging your foreign currency into Thai Baht through an authorised agent, or by transferring it to a foreign currency account at an authorized bank. The remittance must be made within 360 days of receipt.

There is no requirement to repatriate foreign currency for the following individuals:

  • Foreign nationals staying in Thailand for less than three months
  • Diplomatic staff
  • Thai emigrants who are permanent resident or working abroad.

 

Thai monetary policy

Inflation-targeting is at the core of the monetary policy pursued by the Bank of Thailand. It has been the case since 2000. Until the late 1990s, Thailand’s monetary policy was based on an exchange rate target versus the US dollar.

Although the Bank of Thailand has the right to decide its inflation target, the target hasn’t changed much since the introduction of inflation-targeting. Currently, the Bank of Thailand aims at keeping the inflation rate between 0.5% and 3%.

In effect, the Bank of Thailand’s monetary policy has been dovish since 2012. As a result, interest rates and the Thai Baht have been going down.

Dovish monetary policy is broadly what most central banks round the world have been doing lately. In an inflation-targeting context, this is usually justified by a need to:

  • Provide monetary stimulus and boost the economy
  • Reduce deflationary risks.

 

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