Geert Bekaert and Campbell R. Harvey's
Chronology of Economic, Political and Financial Events in Emerging Markets
Major Political and Economic Events
The Securities Exchange of Thailand (old SET) was established.a8
Foreign Promotion Act, guarantees that no private business will be nationalized. Tax exemptions are granted for three to eight years, as are tariff exemptions and reduction in income taxes. Free repatriation of profits and dividends.a
Interest rate ceilings for financial institutions from 15 percent limit imposed by usury law.s
The tax holding for interest payment on foreign loans, originally scheduled to end on Sep. 30, 1981 and to apply only to loans with an original maturity exceeding 12 months, was extended until the end of the year and to cover loans of all maturities.a3(first entry)
The Exchange Equalization Fund introduced a forward exchange cover facility for U.S. dollar funds borrowed abroad by the commercial banks and their customers; the facility provided coverage for three months, with a premium of B 0.04 per US$1 for forward sales.a3
Board of Investment criteria are changed to facilitate export-oriented investment. While new criteria require majority local ownership for firms producing in the domestic market, they permit majority foreign ownership of export-oriented firms; plants whose output is wholly exported are permitted to be owned 100 percent by foreigners.s
Banking crises (1983-1987): 15% of bank assets were non-performing.a1 Causes: oil shock in 1979/80, deficient bank management, shortcomings in regulatory and accounting framework as well as inadequate supervision. Overall change in macro policies: devaluation of exchange rate and tight fiscal and monetary policy.a2
The exemption from the withholding tax on interest payments on foreign loans, originally scheduled to end at Dec. 31, 1982, was extended to June 30, 1983 for loans with maturities of more than 12 months.a3
The above exemption from the withholding tax was further extended to June 30, 1984, but only for foreign loans with maturities of more than 24 monthx.a3
Special government bonds bearing 5% interest rate and with a 10-year maturity were issued for a period up to the end of fiscal year 1983 in B 1 million denominations in an amount not exceeding B 100 million; they were offered for subscription to foreign investors intending to invest and reside in Thailand. a3
Thailand abandons fixed exchange rate vis-à-vis the dollar. General credit restrictions abolished but restrictions on bank lending rates reimposed. Ceilings for loans to priority sectors lowered.s
The introduction of the Insider Trading Laws.a4
The exemption from the withholding tax granted to interest payments on foreign loans with maturities of more than 24 months was terminated.a3
IMF standby credit.a Restrictions on inwards long-term investments were eased. Mehrez and Kaufmann Liberalization date. a1
All private foreign borrowing at the Bank of Thailand was required to register within seven days of the signature date, and not after the loan funds were imported and sold to authorized banks.a3
Bangkok Fund Ltd launched on the London Stock Exchange with net asset value of $163.5 million (in December 1991).aa
Morgan Stanley launches $30 million Thailand Fund.
General Yongchaiyut called for reforms.
ASEAN free trade agreement extended.
Inauguration of the Alien Board on Thailand's Stock Exchange. The Alien Board allows foreigners to trade stocks of those companies which have reached their foreign investment limits. Thais continue to trade stocks on the Main Board.o,q [Park and Van Agtmael claim early 1988 but two other sources establish the date as September 1987.]e
Bekaert/Harvey Official Liberalization date. [Final version].
Chartchai Choonhavan takes office.
Kim and Singal Liberalization date.
IFC Liberalization date.i
Bekaert/Harvey Official Liberalization date. [NBER version].
Ceiling on foreign borrowing raised.
Abolished deposit rate ceilings on commercial bank time deposits greater than one year.s
US imposes restrictions on imports from Thailand.
Authorized banks were permitted to accept foreign notes and coins up to US$5,000 or its equivalent for deposit in a foreign currency account in favor of a person in transit or a person entering Thailand temporarily.a3
Authorized banks were permitted to export foreign notes in surplus of normal banking operations for deposit abroad without prior approval from the Bank of Thailand.a3
Accusations of corruption. 
Strikes protesting privatization. 
Domestic firms no longer need to get approval to pay dividends to foreigners.o
Ceiling on loan rates raised.
Thai citizens gain access to foreign bank accounts.o
The maximum limits on transfers that commercial banks are authorized to approve without prior approval from the Bank of Thailand were increased.a3
Twenty ministers sacked in corruption scandal.
First ADR announced.aa
Coup overthrows government. Investability Index jumps 35 percent.
Prime Minister Chatichai ousted.
Announcement of the loosening of foreign exchange controls and the introduction of the value added tax system in January of 1992. Controls and reporting requirements for the repatriation of dividends, capital gains, foreign currencies, and share certificates are partially removed. 
ADR effective date. (Company=ASIA FIBER COMPANY LIMITED, Exchange=OTC)a11
Controls and reporting requirements for the repatriation of dividends, capital gains, foreign currencies, and share certificates continue to be partially removed.o
The Securities and Exchange Commission (SEC) was established and the old SET was reformulated as the Stock Exchange of Thailand (SET), which is the secondary equity market and is largely self-regulated for day-to-day operations.a8
Ceilings on loan rates were removed. Mehrez and Kaufmann's second Liberalization date. a1
The first prosecution under the Insider Trading Laws.a4
First exchange-traded overseas listing.a9
A dealer's network serving as the central channel for all bond trading was established under the name of the Bond Dealers Club (BDC).a8
The ceiling on the amount authorized banks are permitted to lend to nonresidents in foreign currency was eliminated. The max amount of FDI or loans that domestic residents may provide to their affiliates without authorization from the Bank of Thailand was increased from $5 million to $10 million a year.a3
Finance and securities companies were required to hold a daily long and short foreign exchange position not exceeding 25% and 20%, respectively, of first-tier capital funds.a3
The average weekly net long and short foreign exchange position that authorized banks are required to hold were changed to 20% and 15%, respectively, of first-tier capital funds.a3
The Bank of Thailand required banks to submit detailed information on risk control measures on trading in foreign exchange and derivatives.a3
The Bank of Thailand imposed a reserve requirement of 7% on nonresident baht accounts with maturities of less than one year.a3
The Bank of Thailand adopted a new method of calculating nontrade net open foreign exchange positions for foreign and locally incorporated banks, whose foreign-exchange-denominated loans are not to be counted as foreign assets if the loans are used for purchasing unused land or for personal purposes. For certain  other categories, only 50% of the loan would be allowed to be counted as a foreign asset. Borrowers who fully hedge the foreign exchange risk by buying foreign exchange forward from the bank that extended the loan are exempted from this requirement.a3
The Thai prime rate stands at 13.75%, the highest in several years.
The Bangkok Stock Dealing Center (BSDC)- or the organized OTC market-was established to bolster the liquidity of securities which are offered to the public but are unqualified to be traded on the main SET.a8
Laeven's banking liberalization (FLI) dates.a13
Finance and securities companies were permitted to set up banks outside Bangkok with approval.a13
The Bank of Thailand said it would pump more funds into the market by intervening in the foreign exchange and repurchase markets.
The government unveiled a tax-cut package aimed at stimulating exports and reducing the current account deficit.
The government planned to reduce interest rates.
The overnight rates rose to 25%. The baht fell to its lowest level in 10 years. The central bank boosted short term rates. Thai officials refused to join the World Trade Organization agreement to liberalize the telecom industry.
The Financial Minister pledged to reduce interest rates by 2% by year-end.
(Controls on derivatives and other instruments) The BOT introduced a series of measures to limit capital inflows.a3
(Controls on credit operations) The BOT limited transactions with nonresidents that could facilitate the build-up of baht positions in the offshore market, including direct loans, overdrafts, currency swaps, interest rate swaps, forward rate agreements, currency options, and interest rate options.a3
(Controls on capital and money market instruments) The foreign ownership limit of 25% for financial institutions was lifted on a case-by-case basis.a3
Devaluation of the Thai Baht. 
The central bank ordered 42 finance companies to suspend operations.
S&P cut the ratings of seven financial institutions. Thomson Bankwatch downgraded its sovereign risk rating for Thailand to "BBB" from "A-." Thailand was meeting conditions for a $17.2 billion rescue package from IMF.
(Controls on capital and money market instruments) Foreign investors were allowed full ownership of local financial institutions for up to 10 years.a3
Economic growth estimate for 1997 was cut to about 1% from 3% by the central bank. Finance Minister Thanong Bidaya resigned from his post.
Prime minister Chavalit resigned. Chuan Leekpai, Democratic party's leader, was named the country's new Prime minister and Tarrin Nimmanaheminda was appointed to the finance minister post. The Stock Exchange of Thailand (SET) will allow short-selling of the 50 issues in the SET 50 Index starting January 1. Thai Farmers Bank announced that non-performing loans comprised about 18% of total loans.
The BOT announced that foreign investors would be allowed to hold more than 49% of the shares in existing financial institutions for a period of 10 years without the approval of the Ministry of Finance.a8
58 finance companies were suspended, 56 of which would be closed. Moody's lowered government debt and he debt of 11 banks and financial companies to "junk" status. Fitch IBCA cut the debt rating of ten banks.
A new state-owned commercial bank was launched to manage assets of 56 finance and securities firms closed by the government in 1997. The 49% foreign ownership limit for securities companies was scrapped. Creation of two-tier baht exchange market (domestic and offshore). Decision to dismantle currency controls was made on January 30.
(Provisions specific to commercial banks and other credit institutions) A maximum outstanding limit of B 50 million on baht credit facilities per counterparty was introduced.a3
Definition for "bad loans" changed to -those in which no interest has been paid for three consecutive months, compared with the current standard of six months.
Interest rate in Thailand was at six-year highs.
The BDC was restructured and tranformed into the Thai Bond Dealing Center (Thai BDC) to cover Thailand's secondary market for bond-trading. It is self-regulated but subject to SEC oversight. a8
The government nationalized seven finance companies, including two publicly traded firms (Union Asia Finance Pcl. And Nava Finance Pcl. S&P downgraded the long-term foreign currency rating of the country's five biggest banks. (Thailand has $90 billion in foreign debts, largely in US$..)
Japanese yen, which fell to a seven-year low, set off currency pressure. The government delayed a 50 billion baht first phase a 500 billion baht($11.8 billion) bond fund -raising approved in May to finance the Financial Institutions Development Funds.
         980701 Banks are required to classify loans for which payments have not been made for three months as NPLs.a8
            9808 To deal with banks unable to raise enough capital to cover their write-offs of mounting bad loans, the government decided at mid-month to offer fresh capital to banks that voluntarily write off bad loans against shareholder equity.
         980808 (Provisions specific to commercial banks and other credit institutions) Commercial banks are required to maintain at least 6% of their nonresident foreign exchange deposits in the form of (1) at least 2% as nonrenumerated balance at the BOT; (2) at most 2.5% vault cash; and (3) the rest in eligible securities.a3
            9809 The government approved tax exemptions for those companies that restructure delinquent loans.
            9810 A state agency was created to develop a secondary market for Thai mortgages. The state agency announced it will soon begin to buy mortgages and resell them as securities to boost
liquidity in the property market. 
            9811 The central bank reported it would ease finance companies’ limit on ownership of other companies, to promote debt for equity swaps with delinquent borrowers.
            9812 Approximately 46% of Thai bank loans was reported delinquent by at least three months. GDP rose by 5% this year.
            9903 The bankruptcy and foreclosure bills were passed by the Senate at mid-month.
            9904 Moody’s raised big banks' credit rating.
The first quarter GDP rose 0.9% year-on-year, after a sharp 9.4% plunge in 1998.
Thailand's delinquent loans rose to a record 47.7% of all credits.
The number of nonperforming loans fell to 45.3% of total credits and continued to fall to 42.3% in November. Standard Chartered acquired 75% of NaKornthon Bank.
Thai baht helped equities to reverse course.
United Overseas Bank from Singapore purchased Radanasin Bank Plc. The central bank was expected to sell two more banks early in 2000.
Creditors fail to reach a debt-restructuring agreement with Thai Petrochemical Industry, causing Thai stock markets to be the worst performing stock market year-to-date in the Pacific Rim.
Thailand's bankruptcy court declared Thai Petrochemical Industry insolvent.
Creditors of Thai Petrochemical Industry gained control of the company. Import increased by 18% while exports rose only 12%.
The baht depreciated 3%.
Moody's Investors Service raised investment grade. But Thai market still became Asia's biggest decliner as foreign investors dumped shares.
Inflation was up by 2.3%.
The government would dissolve Parliament.
The Bank of Thailand tightened regulations on baht trading.
The government announced a stimulus package to aid the property sector, giving homebuyers a personal income tax exemption on income of 100,000-200,000 baht.
The Board of Investment approved 11 investment projects to boost the economy. The government was allowed by the Parliament to set up the Thai Asset Management Corp. (TAMC), which would buy out nonperforming loans from state-owned and private banks.
Thailand successfully concluded Article IV consultation with the IMF.
The Thai cabinet announced a 58 billion baht economic stimulus plan, and approved a US$250 million Thailand Equity Fund to boost the country's investment. After partially privatizing state oil company PTT successfully, the government planned to sell similar state-owned companies.
011030 The Cabinet today approved Finance Ministry plans to issue up to US$4.46bn of government bonds and treasury bills in order to finance the 2001-02 state budget deficit. Thailand's budget deficit is expected to weigh in at around US$4.5bn, up from initial projections of a US$2.3bn shortfall. While full details of the debt issue were not disclosed, the package is expected to include US$2.7bn in one- to 20-year bonds and US$1.8bn of short-term treasury bills.
011127 The government is preparing its first overseas sovereign bond issue since the 1997 financial crisis. Japan's Daiwa Securities SMBC and Nikko Salomon Smith Barney have been approved by the Finance Ministry to act as co-lead underwriters for the US$281.5m Samurai bond issue.
011207 BoT Files US$3.4bn Suit Against Former Governor
020123 The Thai baht yesterday weakened by 4% against the US dollar following a surprise interest-rate cut by Thailand's Central Bank on 21 January. The Bank's Monetary Policy Committee cut its key 14-day repurchase rate by 0.25% to 2%, a move aimed at stimulating economic growth. The decision brought about the second rate cut within a month, providing a clear manifestation of a change in the government's economic strategy
020403 Bahrain to Invest US$500m in Thai Equity
020701 Central Bank Warns on Risk of Deflation
020816 Thailand will repay all of the outstanding US$1.2bn loans from the International Monetary Fund (IMF) by January 2003, Prime Minister Thaksin Shinawatra declared yesterday. The money is all that remains to be repaid of the US$17bn credit line that was extended to Thailand during the 1997-1998 Asia crisis. If the government meets Thaksin's boast it will have finished repayment a year ahead of schedule, saving on interest costs
021120 The Bank of Thailand (BoT) today moved to cut its leading 14-day repurchase rate by 25 basis points, to 1.75%
021216 The economy expanded by 5.8% in the three months to end-September, setting Thailand on course to become one of Asia's top economic performers this year
030314 the Stock Exchange of Thailand (SET) suspended another ten listed companies from trading, after auditors indicated that Q4 2002 statements were incomplete or unsatisfactory.
030514 SARS to Cost Thai Economy US$500m-US$1bn
031015 The Bank of Thailand yesterday beefed up restrictions on non-resident bank accounts, in a bid to cool speculation that has helped fuel recent appreciation in the value of the baht. Henceforth, a ceiling of B300m (US$7.53m) will be placed on deposits by non-residents in Thai bank accounts, with no interest paid on funds held for less than six months. Commercial banks will also ensure that current accounts held by non-residents are used solely for the settlement of transactions relating to trade and investment rather than for speculation. However, the bank stopped short of imposing a tax on short-term capital flows. 
040107 The cabinet yesterday approved proposals submitted by the central Bank of Thailand to rationalise the state-owned banking sector. Consolidation through mergers forms the core of the strategy. Incentives will be deployed to speed up the process, ranging from tax breaks and waivers to the easing of loan restrictions. The programme will be two-tiered, including mergers among smaller financial institutions to obtain restricted banking licences, and the amalgamation of major banks to allow them to compete on a global scale.
20040423 The government yesterday approved legislation that allows overseas banks to sell baht-denominated bonds for the first time in local markets. Issues by premium foreign institutions will be capped at Bt15bn (US$380m) and restricted to five-year maturities, according to the directive issued by the Ministry of Finance
20040625 Prime Minister Thaksin Shinawatra yesterday delivered Thailand's first balanced budget since the 1997-1998 Asian financial crisis to parliament, two years ahead of schedule. However, the government's sums may be undone by over-rosy growth projection.
20040701 Exports surged by 21.7% in May to total a record US$7.95bn, according to data released by the central Bank of Thailand yesterday. Imports rose by 33.8% over the same period, totalling US$7.94bn. The trade balance subsequently recorded a small US$10m surplus reversing the previous two straight months of deficit.
20040702 Headline consumer prices rose by 3.0% in the 12 months to end-June 2004, according to data released yesterday by Thailand's Commerce Industry. The rate of gain was the fastest since January 1999 and marked a sharp acceleration on the 1.7% inflation recorded in the corresponding period of 2003.
Regulations on Foreign Investors

Restrictions: 1.maximum 49% foreign ownership (restricted foreign shareholding in some specific areas of business, e.g. 25% for commercial banks and financial companies). 2. Foreign capital inflows need to be registered with free repatriation. Commercial banks are authorized to approve the purchase of foreign exchange for remittance abroad without limit.

Taxation: 10% dividend tax rate, no tax on individual capital gains and 12.5-15% institution capital gains.a5(first entry)


No change through 2001.a5

20020215 Thailand's Board of Investment (BOI) is to offer investors greater tax privileges as part of efforts to attract more foreign direct investment (FDI) to the country. Chaturon was quoted as saying, 'The World Trade Organisation (WTO) requires that Thailand gradually lower its taxes and eliminate those things that are considered obstacles to investment in order to create a favourable investment environment in the country,' adding that the BOI is to embark on a series of investment promotion campaigns in countries such as the US, China, Japan and the European Union (EU) and will open representative offices in Hong Kong, San Francisco, Californis (US) and China
200307 The central Bank of Thailand (BoT) eased foreign exchange controls, which were imposed following the 1997-1998 Asian financial crisis. Restrictions on participation by domestic entities in foreign debt markets were relaxed to allow institutional investors to purchase up to a combined US$500m in sovereign and quasi-sovereign paper, offered by investment grade issuers.

Last updated 7/10/04 by Jerome Mo, Duke Univ.

and eliminate those things that are considered obstacles to investment in order to create a favourable investment environment in the country,' adding that the BOI is to embark on a series of investment promotion campaigns in countries such as the US, China, Japan and the European Union (EU) and will open representative offices in Hong Kong, San Francisco, Californis (US) and China 200307 The central Bank of Thailand (BoT) eased foreign exchange controls, which were imposed following the 1997-1998 Asian financial crisis. Restrictions on participation by domestic entities in foreign debt markets were relaxed to allow institutional investors to purchase up to a combined US$500m in sovereign and quasi-sovereign paper, offered by investment grade issuers.

Last updated 7/10/04 by Jerome Mo, Duke Univ.