BANGKOK — Thailand’s baht sank to a six-year low as a central bank move to allow domestic investors easier access to overseas markets sparked concern that outflows will increase.

The Bank of Thailand will permit wealthy individuals and companies to directly invest in foreign equities, bonds, mutual funds and other financial assets, Deputy Governor Pongpen Ruengvirayut told reporters today (Aug 28). Overseas investments will be limited to US$5 million (S$7 million) per year, she said.

The baht retreated 0.5 per cent to 35.843 per US dollar as of 1.38 pm in Bangkok, erasing a gain for the week, according to data compiled by Bloomberg. It fell to 35.94 earlier, the weakest since March 2009, and has dropped 8.1 percent this year.

“The central bank is probably more comfortable letting funds flow out through residents rather than making it easier for foreign investors to move cash in and out,” said Mr Shigehisa Shiroki, assistant general manager at Mizuho Bank’s treasury department in Bangkok. Orderly declines in the baht look acceptable to the central bank, he said, adding that the currency could weaken to 36 per US dollar over the next few months.

The Bank of Thailand made two unexpected cuts to its benchmark interest rate this year to weaken the baht and help exporters. In April, it eased restrictions on outflows by raising limits for Thais’ foreign-currency deposits and for overseas property investments.

International investors withdrew a net US$1.22 billion from domestic equities this month, poised for the biggest monthly outflows since 2013, according to stock exchange data. They also sold a net US$451 million of local bonds.

A recent explosion in Bangkok’s central shopping district may cut tourist arrivals by 300,000 this year and trim economic growth by 0.05 percentage point, Mr Ekniti Nitithanprapas, a senior finance ministry official, said at a press briefing today. The ministry maintained its economic growth forecast for 2015 at 3 per cent.

Ten-year sovereign bonds dropped in the first weekly decline since July, with the yield rising 15 basis points to 2.81 per cent, data compiled by Bloomberg show. The three-year yield climbed six basis points from Aug 21 to 1.64 per cent. BLOOMBERG