Insights into how to use a foreign currency deposit account (FCD) of Thai people today


By Boriporn Uraiwattana, Janyarak Tantipalakorn, Sirada Techarukphong and Araya Thongteeraphap  


Exchange rate fluctuations are one of the key factors affecting the profits and performance of sectors whose income and expenses are denominated in foreign currencies. Entrepreneurs can prevent or manage such risks in many ways. The tools that are widely used today are Forward and Option. In addition to these two tools, there is another important tool which is deposit account. Foreign Currency Deposit Account (FCD), which can be used to effectively manage foreign exchange risk. But the data on the use of FCD accounts over the past 4 years, despite the major relaxation of the FCD account criteria at the end of 2020, as a whole, saw a clear expansion. But not much in the corporate group. This paper therefore focuses on studying the use of FCD accounts of Thai people, including in-depth analysis of accounting behavior. To understand the structure and behavior of using FCD accounts to find ways to drive Thai people to be able to manage foreign exchange risk through using FCD accounts more.

Meaning and benefits of FCD account

An FCD account is a deposit account for individuals or juristic persons who wish to deposit money in foreign currency. At present, commercial banks in Thailand offer deposit services for FCD accounts in more than 15 currencies, such as the US dollar (USD), yen (JPY), euro (EUR), yuan (CNY), and other currencies. Customers can open FCD accounts in various formats. such as current account savings account and fixed deposit account The same is true for a Thai baht account.

FCD accounts are useful in that they can be used as a tool for managing foreign exchange risk, reducing costs and increasing efficiency in managing income and expenses in foreign currencies. which is suitable for import-export entrepreneurs whose incomes and expenses are in the same currency and have sufficient liquidity to be able to keep foreign currency for payment in the future This is different from other types of foreign exchange hedging tools such as Forward and Option that are suitable for importing or exporting entrepreneurs who have only one income or expenditure. or income and expenditure have different currencies Or need liquidity to use in circulation rather than keep in the account

Based on these benefits, the BOT has a policy to encourage Thai people to use FCD accounts to manage exchange rate risk and manage foreign currency liquidity more flexibly and efficiently. Including reducing problems and obstacles from the use of FCD accounts. Therefore, the BOT has relaxed the major regulations on FCD accounts on 5 December 2020, which are as follows:

  1. Reduce account types to one type. and no limit on outstanding balance
  2. Thai individuals can freely transfer money between FCD accounts and freely buy foreign currency into their own FCD accounts. without limitation and do not need to present the burden documents

In this regard, the BOT has taken action in parallel with the relaxation of other criteria under the guideline to push for a new adjustment of the FX ecosystem, such as investing in foreign securities. (You can learn more details on opening an FCD account by following the attached link (

As a result of the relaxation of FCD rules, it was found that FCD account transaction volume continued to grow (Figure 1, blue bar graph), on average, increasing by 41% from 29.87 billion US dollars in the pre-easing period (Figure 1). July 2018 – Nov. 20) to 41.98 billion US dollars in the period after relaxation (Dec. 20 – Dec. 21).

In addition, if considering the proportion of transaction volume through FCD accounts compared to overall foreign exchange transaction volume (Figure 1, line graph), it was found that the monthly average transaction volume of FCD accounts continued to increase from 41% in the pre-easing period to 49% after relaxation

Figure 2 (line graph) represents the number of people with accounts. FCD1 is increased The average growth rate during the easing period was 1.8% per month, while the growth rate after the easing increased to 3.8% per month, and the number of accounts continued to increase as well (Figure 2, bar chart). ), with an average growth rate increasing to 3.1% per month, compared to 1.9% per month in the pre-easing period. The expansion in the last three months of 2021 was boosted by a collaboration between banks and gold shops to provide online gold trading services and use FCD accounts as payment channels.

However, from data on outstanding FCD accounts at the end of the month during Jan. ‘189 – Dec. ’21 (Figure 3 – 5), it shows that The FCD account balance at the end of the month has not changed significantly. Since most of the account balances depend on liquidity management, most of the FCD accounts of both juristic persons and individuals are denominated in US dollars (USD), as it is the main currency used for trading goods, services and investments.

In order to better understand the behavior of FCD account users, the authors have studied the behavior of FCD transactions in depth. From the study, it was found that the behavior of using FCD accounts of juristic persons is different from the behavior of ordinary people. Therefore The author therefore divided the analysis into two parts as follows.

Among legal entities that conduct foreign currency transactions It was found that the number of juristic persons conducting transactions through FCD accounts was not large. On average, each year (2018 – 2021) accounted for about one-third (29%) of the total number of juristic persons doing foreign currency transactions (11,037 out of 38,024 total) (Figure 6). Has changed significantly over the past 4 years (2018 – 2021). However, after the relaxation of the FCD rules, it was found that the proportion of juristic persons conducting transactions through FCD accounts on average each year slightly increased from 28% in the previous period. relaxation increased to 31% in the period after relaxation Details are shown in Table 1.

The FCD accounting market of Thai juristic persons has a concentration of transaction volume with only a few juristic persons. From the data on the proportion of transactions through FCD accounts of juristic persons during 2018 – 2021, it was found that the number of juristic persons transacting through FCD accounts accounted for 5% (753 out of a total of 15,144 persons), covering the majority of transactions through FCD accounts up to 90% (1,417 billion US dollars out of a total of 1,583 billion US dollars), which, when considering the proportion of such concentration before and after the relaxation of regulations, found that there was no significant change.

In analyzing the behavior of legal entities using FCD accounts, the authors share the analysis aspects as follows: (1) the main objectives of FCD users; (2) the majority of business groups using FCD accounts; and (3) continuity of use. and (4) balance between incoming and outgoing transaction volumes. (inflow-outflow)

3.1.1 Main purposes of the FCD account holder

From the total transaction volume through FCD accounts during Jan. ’18 – Dec. ’21, it was found that the majority of juristic persons used FCD accounts for the purpose of export-import goods (36%) and investment/borrowing/lending with Overseas affiliates (17%) (Table 2)

3.1.2 Most Business Groups Using FCD Accounts

The top 3 business groups with the total deposit and withdrawal transactions (34% of the total deposit and withdrawal transaction volume) during Jan. 2018 – Dec. 21 (Figure 7) are computer and electronic manufacturing businesses (14 %) coal and petroleum production business (10%) and financial service activities business (10%), which the business group that uses the said FCD is a group that has both import and export transactions.

The analysis shows that Approximately half of legal entities use FCD accounts consistently (Frequency Index ranging from 0.5 to 1.0) (Figure 8) (8,165 out of 15,144 persons using FCD accounts over four years). Manufacturing that uses the FCD account on an ongoing basis. Because there are imports and exports on a regular basis.

From the study, it was found that most juristic persons have transactions in one direction. (Inflow-Outflow Balance Index is at the leftmost bar, or 0.1) (Figure 9). The group of entities with a balance of foreign exchange volume between inflow and outflow with Inflow-Outflow Balance Index value from 0.5. up to 1.0 and using FCD accounts accounted for 68% of the group of legal entities with the balance of foreign exchange transaction volume. And to assess the results of the relaxation of accounting rules, FCD therefore divides the consideration into the period before relaxation (Jan. ’18 – Nov. 20, total 35 months) and post-relaxation period (Dec. ’20 – Dec. ’21 in total. 13 months), it was found that the proportion increased from 68% in the pre-relaxation period to 75% in the post-relaxation period.

In addition, the results from the analysis Inflow-Outflow Balance Index during Jan. ’18 – Dec. ’21 shows that There are 4,074 entities with relatively balanced transactions but not using FCD accounts, which suggests the possibility of switching to FCD accounts of these entities in the future. Especially after the BOT has relaxed the regulations on the use of FCD accounts and other supporting policies to allow Thai juristic persons to gain a lot of benefits in managing foreign exchange risk and foreign currency liquidity from using FCD accounts. climb

3.2 Behavior of individual FCD accounts and the relaxation of the FCD account rules for individuals

According to the number of FCD accounts at the end of Dec. ’21, it was found that the accounts of natural persons There are a total of 233,973 accounts, which is about 4.6 times higher than the number of juristic persons’ accounts (juristic persons have a total of 50,660 accounts). country Or to study abroad. The FCD account of an individual has a relatively small volume of transactions or movements.

After the Bank of Thailand has relaxed the regulations on the use of FCD accounts for investing in securities denominated in foreign currency. As a result, more individuals who are investors open FCD accounts. And from Figure 10, the volume of transactions through FCD accounts has increased dramatically from 2018, when individuals had deposits and withdrawals of only 1.4 billion US dollars, increasing to 3.1 billion dollars. US$ in 2021, mostly from investment objectives This includes investment in foreign securities and domestic gold trading in US dollars (USD).

However, the volume of individual FCD transactions is still concentrated in a small number of individuals, with 90% of the FCD transaction volume being only 4,642, which is 11% of the total number of individual transactions. (44,143 cases), which, when considering the proportion of such concentration before and after the relaxation of the criteria, found that there was no significant change.

  1. Reasons why some people do not use FCD accounts

Based on inquiries from entrepreneurs, investors and the general public Including FCD account service providers during Nov. – Dec. ’21 found that the reason why the FCD account has not yet been used is shown in the table.

  1. Summary

The study found that after the relaxation of FCD and other rules in 2020, the overall use of FCD accounts has grown significantly. have different characteristics, forms, and objectives, whereby (1) juristic persons will focus on using FCD accounts for foreign exchange risk management arising from international trade, investment, and borrowing. and there is a movement of the account continuously, while (2) most individuals open an FCD account to buy foreign currency to deposit for payment in the future. After the relaxation of regulations on the use of FCD accounts for securities investment, in 2021, individuals depositing and withdrawing foreign currency through FCD accounts for investing in foreign securities increased considerably. There are some entrepreneurs who may benefit from using FCD accounts as a currency risk management tool. The authors therefore hope that in the future, the FCD account will be one of the risk management tools that entrepreneurs can use effectively. To increase immunity against exchange rate volatility in the global financial market, it will become more and more volatile in the future.

1 FCD account holders may have multiple FCD accounts depending on their needs.
2 Yearly FCD account balance data from 2020

3 This analysis does not include entities that transacted in the first 48th month, as the figures shown are biased as such entities may not transact in FCD accounts in subsequent months.

This article was accomplished with helpful comments from Khun Wannaporn Laksanasut, Khun Chananun Supadul, Khun Jiraphon Mahuttikarn and others. FAQ Editor: Dr. Nacha Ananchotikul, Dr. Saowanee Chanta. Phong The authors would like to thank you very much.

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