* Raises repatriation limit to $1 million from $200,000
* New rule to spur fund outflows, reduce pressure on baht
* Baht gained nearly 9% last year, but weakened 5% this year (Adds detail)
By Orathai Sriring
BANGKOK, Feb 28 (Reuters) - Thailand’s central bank said on Friday that the threshold for proceeds that do not need to be repatriated has been raised to $1 million from $200,000, effective on March 2.
The relaxation includes not only export proceeds but also other income as well, Assistant Governor Vachira Arromde said in the statement.
Those with export proceeds exceeding or equal to the new threshold would be allowed to use the revenues to offset foreign currency expenses, without having to repatriate the funds, she said.
The relaxation will help businesses reduce fund transfer costs and manage foreign exchange risk more efficiently, especially for exporters as 80 percent of their revenues will fall within the new threshold, Vachira said.
It will also promote capital flow balance and lessen pressure on the baht, she added.
The relaxation, first mentioned in November, is among other measures already in effect aimed at curbing strength in the baht, which was Asia’s best performing currency last year, gaining nearly 9% against the dollar.
(Click for recent relaxed rules)
But the baht has weakened 5.4% against the greenback so far this year, becoming Asia’s worst performing currency, as the coronavirus outbreak hurts Thailand’s lucrative tourism sector.
However, central bank Governor Veerathai Santiprabhob said earlier this month that the level of the baht was still not in line with economic fundamentals, despite recent weakness. (Reporting by Orathai Sriring; Editing by Alex Richardson)