Dealers head for door over Thai baht controls
Drastic action taken by the Thai central bank to rein in the baht from its near ten year highs has rocked foreign market confidence and prompted calls for a U-turn.
The baht fell 1.8 per cent in currency trading on the dollar during Monday, from 35.70 baht to 35.06 baht. In other trading, the euro stood at $1.3095 and ¥154.45.
The new rules will require all investors to keep baht holdings worth $20,000 or more not linked to trade or foreign direct investment in Thailand for at least a year after purchase.
The national stock exchange suffered its biggest one day drop since the 1997 Asian financial crisis following the announcement, falling 13 per cent to a two year low.
The bond market also suffered, as foreign investors pushed up yields 20 to 30 basis points and slashed prices as they dashed to divest Thai holdings.
"Please call an ambulance, there is a bloodbath," a domestic broker told CNN. "Foreign players seem to be selling all maturities today, but I think it's only the first round.
"There is a lot of money already in the Thai markets. If they're pulling out, we're dead," he added. "I'm not sure if we're going to get a bonus this year."