The Bank of Thailand will limit online gold trading by January 29 to curb pressure on the baht, which has strengthened against the dollar, impacting exports and tourism.
Key Points
- Central Bank Measures: The Bank of Thailand will cap online gold trading to ease pressure on the baht by January 29. Daily trading limits will be set between 50-100 million baht per account due to the baht’s recent strengthening against the dollar.
- Economic Context: The baht has appreciated 1.2% this year, following a 9% increase in 2025, attributed to gold trading and foreign fund inflows. The bank recently raised the foreign income repatriation threshold to $10 million per transaction.
- Impact on Exports: The baht’s strength threatens Thailand’s export competitiveness and tourism sector. The central bank is exploring additional measures, including a possible business tax on gold trading, to stabilize the currency.
Regulatory Limits on Online Gold Trading
The Bank of Thailand is set to implement new restrictions on online gold trading starting January 29. This initiative aims to mitigate the upward pressure on the baht, Thailand’s currency, which has appreciated significantly against the U.S. dollar. The central bank will cap daily online gold trading at 50-100 million baht per account. This decision is driven by the baht’s increase of 1.2% against the dollar this year, following an impressive 9% rise in 2025, indicating a trend that could pose challenges for the Thai economy.
Impact on the Thai Economy
Gold trading, along with high foreign fund inflows, has been primarily responsible for the baht’s rapid appreciation in recent days. The central bank has already raised the foreign income repatriation threshold from $1 million to $10 million per transaction, seeking to control capital flows that exacerbate currency strength. Bank Governor Vitai Ratanakorn highlighted that their intervention is limited to the onshore market, which accounts for only 40% of total forex transactions. After evaluating the effects of these measures, the bank may also consider implementing a specific business tax on gold trading to further regulate the situation.
Economic Competitiveness and Currency Alignment
The robust strength of the baht has raised concerns regarding Thailand’s export competitiveness and the tourism sector, both vital components of the economy. By instigating these new measures, the Bank of Thailand aims to align the currency more closely with underlying economic fundamentals. Such adaptations are crucial at a time when external factors could destabilize economic growth. By managing the currency’s value through regulatory measures on gold trading, the central bank is taking proactive steps to safeguard Thailand’s economic interests and ensure stability in the broader financial landscape.
