Thai central bank plans rules on virtual banks and open banking

BANGKOK, March 25 (Reuters): Thailand's central bank has announced that it is planning new policy guidelines for the banking sector, including virtual banks and open banking, for later this year.

The Bank of Thailand (BOT) will publish guidelines for a public hearing on a virtual bank licensing framework and for the sector's engagement in digital businesses by the second quarter of this year, it said in a statement.

Directions on open banking policy will be announced in the third quarter of 2022, the BOT said.

The new guidelines will reflect previous recommendations from the central bank aimed at repositioning South-east Asia's financial sector to serve a sustainable digital economy, it said.

The Thai baht led gains among Asian currencies on Friday (March 25), appreciating 0.5% for its best day in over a week as investors took heart at the moderation in crude prices as the United States and allies considered releasing oil reserves.

Most regional currencies appreciated marginally, but were still set to show declines for the week, weighed down by expectations that US interest rates will rise faster than previously thought, and concerns arising from the Russia-Ukraine conflict that made investors risk averse.

Investors were particularly wary of oil importing nations, like Thailand, that could suffer if Western economic sanctions were to hit Russian oil exports more severely.

The baht firmed to 33.43 per dollar on Friday, but it was on track to lose 0.5% over the week - making a fifth consecutive weekly decline for one of the top performing Asian currencies in the year so for.

"We think the Russia-Ukraine conflict has worsened the outlook for Thailand's external sector, exacerbating the loss of tourist dollars," analysts at Barclays said in a note.

"Effects of higher oil prices on imports and slowing global growth on exports will become visible over the coming months and should lead to larger trade deficits," they added.

The Bank of Thailand was widely expected to leave its policy rate unchanged at 0.5% - where it has been since May 2020 - when its policymakers meet next week.