Thailand has begun its financial reform policy along with its financial liberalization policy since 1990. The two policies allow Thailands domestic financial market to move more freely under the market mechanism by letting the interest rate be the main factor in the allocation of funds. If the allocation of funds is efficient, the gap between the domestic interest and the foreign interest rate should have a declining trend. However, since the introduction of both plans, the gap between the domestic and foreign interest rate does not have a tendency to decrease. Consequently, this leads to the in depth analysis of degree of financial openness in Thailand. The objectives of this study are to examine the degree of financial openness in Thailand and to investigate the financial liberalization policy from 1991 to 1997. The degree of financial openness will be analyzed by descriptive method using the following indicators: the expansion of the monetary sector, the level and the structure of the interest rate, and the link between the domestic and foreign financial market and the development of domestic bond market. The degree of finanical openness will be analyzed by quantitative method using regression analysis based on the monthly data during 1991 to 1997 under the framework of Edwards and Khan concepts. According to the descriptive analysis, the study shows that after the financial liberalization in 1990, the degree of financial openness tends to depend on each of the studied indicators. First, the degree of financial openness has a tendency to increase due to the deepening and broadening expansion in the monetary sector. Second, the degree of financial openness has a declining trend since 1994 because of the increasing gap of the interest rate. Third, the link between the domestic and the foreign financial market and the development of domestic bond market show that the degree of financial openness is constant since the capital movement is related to the SET index and the development private bond in constant manner. For the quantitative analysis, the result of regression analysis on factors affecting the interest rate indicates that the influence of Eurodollar interest rate and forward premium on the domestic interest rate has increased from 0.822 in 1991 to 0.993 in 1994. However, the trend had since declined and reached -0.154 by the end of 1997. Inflation rate was found to be the major factor affecting the movement of the domestic interest rate. During 1991 to 1994, its effect was decreasing from 0.255 in 1991 to -0.193 in 1994. Nonetheless, the effect rose again to reach 0.892 in 1997. This result indicates that since 1994, the implementation of restrictive monetary policies for stabilization has influenced the determination of domestic interest rate and decreased the degree of financial openness.