Gold trading controls seen having limited impact on baht

Granting the Bank of Thailand powers to control online gold trading transactions will have a limited impact on curbing the baht’s excessive strength, gold and currency experts say, as bullion has soared to a new all-time high of nearly US$4,700 an ounce and the Thai unit is expected to strengthen further.

- NAREERAT WIRIYAPONG.

The Finance Ministry signed a sweeping order to empower the governor of the Bank of Thailand to invoke authority under the Exchange Control Act, requiring gold shops to report transactions to the central bank.

The measure specifically targets gold trading via mobile applications, which authorities believe is directly impacting the baht’s exchange rate.

The regulation under hearing is set to limit gold investment transactions to a range of 20-100 million baht per transaction per day per platform, said Kanjana Chockpisansin, head of research, banking and financial sector at Kasikorn Research Centre (K-Research).

The move is aimed at minimising the impact of skyrocketing gold prices on the baht which has gained 0.9% year to date as Asia's best performing currency. Meanwile, the price of gold has jumped 8.6% so far this year, spurred by intensifying global geopolitical risk and trade war fears.