Thai Central Bank Cracks Down on Gold Trading's Exchange Rate Influence

The Bank of Thailand has taken steps to reduce the impact of international gold prices on the Thai baht exchange rate by imposing restrictions on gold trading.

In March, the bank set a daily limit of 50 million baht for personal online gold trading and encouraged large investors to settle in US dollars rather than baht.

The measures have been effective, with the correlation coefficient between the baht exchange rate and international gold prices dropping from 0.85 last year to 0.3 in April, the lowest level in nearly four years.

However, as gold prices rose recently, the correlation has rebounded to 0.65.

The bank's goal is to build a firewall between gold prices and the baht exchange rate, which has historically been heavily influenced by international gold markets.