Baht onshore/offshore rates equalize
The Thai baht onshore and offshore rates have now equalized following the lifting of the reserve on March 3, said Bank of Thailand (BoT) governor Tarisa Watanagase.
The 30 per cent withholding measure was imposed in 2006 to stem the baht’s speculation due to the gloomy economic outlook back then, and was a bonus for foreigners bringing in currency and utilizing the higher onshore rates.
Khun Watanagase said that the baht had equalized automatically, ‘without intervention’, following the reserve lift and that the economy had improved.
Onshore traded baht is now a lot closer to offshore traded baht since the measure was scrapped, with onshore and offshore dollar transactions at about 31.41 and 31.42 respectively.
Previous figures at the offshore rate of 31.42 baht to the dollar would have seen an onshore rate at roughly 34!
Thailand’s international reserves have also risen sharply in the last couple of years - at US$108 billion today compared with $67 billion at the end of 2006.