Timeline of Thailand's Exchange Rate Regimes

Bangkok,

In 1963, Thailand abolished its floating exchange rate regime by adopting a fixed exchange rate regime that was linked to the U.S. dollar.  Due to the devaluation of the dollar and decreased gold reserves in Thailand, the Bank of Thailand introduced a 4.5% fluctuation range, which allowed the exchange rate to float within a limited range.  In 1978, the baht’s link to the U.S. dollar was broken and an Effective Rate was established.  This meant that the value of the baht was based upon a weighted basket of Thailand’s major trading partners, which included the U.S. dollar, West German mark, Swiss franc, and Japanese yen.  In 1984, the basket of currencies was revised to include the U.K. pound sterling, Malaysian ringgit, Hong Kong dollar, and Singapore dollar.  In 1990, three more currencies were added to the basket including the Brunei dollar, Indonesian Rupiah, and Philippine pesos.  In 1997, Thailand adopted the managed-float exchange rate regime, which allows the value of the baht to be determined by market forces, reflecting the demand and supply of the baht in foreign markets.   The Bank of Thailand only intervenes in order to prevent excessive volatilities and to achieve economic policy targets.   This type of exchange rate regime “…enhances flexibility and efficiency in monetary policy implementation and increases confidence of domestic and international investors.” (International Economics)

Latest views

Marked as favourite