The governor of the Bank of Thailand said Friday the central bank will remove effective March 3 the controversial capital controls it imposed to restrain the country's currency from getting too strong.
Removal of the controls is justified by several factors, including a strengthening economy and a greater balance of inflows and outflows in the foreign exchange market, Bank of Thailand Gov. Tarisa Watanagase told reporters.
The central bank implemented a one-year, 30 percent withholding requirement on many types of capital inflows in December 2006, in part to help maintain the competitiveness of Thai exports by restraining the value of the baht.
But the immediate effect of the measure was to trigger a massive one-day sell-off on the Thai stock market and damage the country's reputation with foreign investors.
Widespread expectations that the controls would be removed had "eroded the effectiveness" of the measure, Tarisa told reporters.
Other measures will be implemented to support the lifting of controls, "she said, adding that the managed float of the baht remains relevant policies.
Bank imposed controls, while Thailand was under military administration found that government seized in honor of former Prime Minister Thaksin Shinawatra was deposed in a coup.
The decision came after the central bank of the country's newly elected Government, headed by Prime Minister Samak Sundaravej, pushed for controls to be removed.
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