The governor of the Bank of Thailand said Friday the central bank will remove the controversial capital controls on short-term capital inflows effective March 3.
Removal of the controls is justified by several factors, including a strengthening economy and a greater balance in the foreign exchange market, Bank of Thailand Gov. Tarisa Watanagase told a press conference.
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 sell-off on the Thai stock market, and critics charged that the measure discouraged foreign investment.