Chapter 2
Maintenance of the Value of the Baht

Section 23. For the purpose of maintaining the value of the baht, the Bank of Thailand or the Exchange Equalization Fund shall effect a spot transaction of the foreign currencies prescribed in the Ministrial Regulation as may be requested by any commercial bank in the Kingdom, provided that the amount of each transaction shall not be less than the amount prescribed by the Minister.

The foreign currencies to be prescribed by the Ministerial Regulation must be the currencies which are lawful components of the Currency Reserve.

The Bank of Thailand or the Exchange Equalization Fund shall not be required to effect a spot transaction as stated in paragraph one while there remains in force a law on exchange control.

Section 24. In effecting a transaction of the foreign currencies between the Bank of Thailand or the Exchange Equalization Fund and commercial banks under Section 23, the rate applicable to the spot transaction shall not differ from the rate of exchange according to the par value of the baht so as to be more than the maximum rate or less than the minimum rate as prescribed by the Minister.

Section 25. The Minister, with the advice of the Bank of Thailand, has power to issue a notification prescribing the maximum and minimum rates applicable to the spot transactions to be observed by commercial banks or other persons. After the effective date of the Notification of the Minister, commercial banks or other person shall not buy or sell foreign currencies in spot transactions at the rate exceeding or below the rates so prescribed.

Commercial banks or other persons shall not be permitted to accept commission or to charge any money incidental to spot transaction except for the reimbursement of telegraphic cost, whether the notification under paragraph one has been prescribed or not.

Chapter 3
Currency Reserve

Section 26. For the purpose of maintaining the stability of the currency, the Bank of Thailand shall maintain a currency reserve, hereinafter to be called the “Currency Reserve”.

Section 27. All existing assets of the Currency Reserve held prior to or on the date on which this Act comes into force shall be held in Currency Reserve under this Act.

Section 28. The Currency Reserve shall be held entirely separate from all other assets of the Bank of Thailand.

Section 29. Subject of Section 22 and 34, the Currency Reserve may not be spent, unless:
(1) at the same time, notes of equal value are withdrawn from circulation;
(2) at the same time, other assets under Section 30 of equal value is received and credited to the Currency Reserve Account.

The Currency Reserve may be spent as aforesaid only by an order of the Governor of the Bank of Thailand of a representative specially appointed by the Governor of the Bank of Thailand for that purpose.

Section 30. The following assests shall be lawful components of the Currency Reserve:
(1) gold,
(2) foreign currencies which are convertible currencies or any other currencies
prescribed by a Ministerial Regulation, which must be in the form of deposit with a bank outside the Kingdom or with an international financial institution,
(3) foreign securities payable in foreign currencies as stated in (2),
(4) gold and foreign assets paid as subscription to the International Monetary Fund,
(5) Reserve Tranche Purchase Certificate
(6) Special Drawing Right Certificate,
(7) securities of the Thai Government payable in foreign currencies as stated in (2) or in baht,
(8) domestic bills which the Bank of Thailand is permitted to purchase or rediscount, provided that the total value thereof does not exceed 20 per cent of the total amount of notes issued.

With respect to the assets stated in (1), (2), (3), (4), (5) and (6) above, the Bank of Thailand shall be required to maintain their total value at not less than 60 per centum of the notes issued.

Section 31. The assessment of value of assets which comprise or which are to comprise the Currency Reserve shall be done as follows:
(1) securities of the Thai Government payable in baht or domestic bills, shall be assessed at the purchase or rediscount price or at face value, whichever is the lower.
(2) assets payable in foreign currencies or Special Drawing Rights shall be assessed as follows:

(a) gold and foreign securities, shall be assessed at the market price as at the end of the preceding year, if purchased during any year, the value shall be assessed at the purchase price until the assessment at the end of such year,
(b) gold foreign assets and Special Drawing Right paid as subscription to the International Monetary Fund stated in Section 30 (4), shall be assessed at the unit value of the Special Drawing Rights as notified most recently by the International Monetary Fund,
(c) Reserve Ttache Purchase Certificate and Special Drawing Rights Certificate, shall be assessed at face value,
(d) foreign currencies sall be assessed according to the amount of deposit with a bank at that period,
(e) securities of the Thai Government payable in foreign curreccies shall be assessed at the purchase or rediscount price or at face value, whichever is the lower.

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