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Published on February 16, 2008

"[A study on] revision of the capital-control rules is under way and will take about a couple months for consideration," Samak told reporters.

"I want to insist that involved agencies are working on the issue with delicate handling."

The requirement for 30 per cent of short-term inflows to be held on deposit with the central bank for a year was imposed in December 2006 to brake the appreciation of the baht but it triggered a massive stock market sell-off.

Finance Minister Surapong Suebwonglee recently said a decision on lifting capital controls would be made before the policy roadshow that the government is planning for March or April.

The new government is pushing to scrap the controversial controls in order to resurrect the country's reputation with investors.

Surapong also said yesterday that the prime minister's statement on the decision of capital controls was a "wide remark".

But the fate of the foreign-exchange curbs depends on when the report from the Bank of Thailand will be completed and the confidence of the government about the information it is studying.

Surapong declined to mention the exact timing of the cancellation of the measures, saying he had told the central bank governor to send him the information as soon as possible.

Chakramon Phasuka-vanich, permanent secretary of the Industry Ministry and a member of the Monetary Policy Committee, which sets the policy interest rate, also supported the abolishment of the restrictions.

"The 30-per-cent rules will have to go as they are short-term measures to limit speculation. The removal is just a matter of timing," Chakramon told reporters.

Former finance minister Thanong Bidaya, who recently returned from Japan, yesterday briefed Surapong on the views of Japanese investors and academics towards the Thai market.

Surapong quoted Thanong as saying Japanese investors had various choices, including Vietnam and India.

"It's a pity if Thailand cannot restore confidence for investors and convince them to invest in Thailand," he quoted Thanong as saying.

The government will try to send a clear signal to win back investors, Surapong said, adding that his conversation with Thanong did not contain anything specific.

Thanong told reporters later that the Japanese in general were not disturbed by the capital controls, as they are exempted as long-term investors. But they are worrying about unclear laws such as the Foreign Business Act, while political stability is also important for them.

Though Vietnam is not a democratic country, its politics are constant enough to attract foreign investors, Thanong added.

Wichit Chaitrong

The Nation, Dow Jones Newswires