Thai Central Bank Bans Foreign Non-deliverable Baht Contracts

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y Anuchit Nguyen

Jan. 29 (Bloomberg) -- The Bank of Thailand told banks to

end non-deliverable baht forward contracts with overseas

investors, saying the agreements may affect the baht's stability.

Some foreign financial institutions entered the contracts

that allow them to exchange other currencies for the baht by

paying the difference between the Thai currency's value on the

day the agreement expires and the contracted value, the central

bank said in a statement on its Web site.

The transactions may influence the baht's stability, the

Bank of Thailand said. Commercial banks were told on Jan. 25 to

end non-deliverable baht forward transactions with non-residents,

it said.

Hahahaha this is the all time classic...how can anyone stop banks trading an offshore market??invasion maybe,take cover in Singapore,Hong Kong,New York and London....what a joke of a policy

Cant wait for next mondays installment

[Barney_the_Dinosaur]

...in answer to your question, the Bank of Thailand CAN tell domestic Thai banks what to do.

"Banks" in the above context means local banks, who are subject to BOT authority.