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BANGKOK - Thai stocks plunged yesterday after regulators told banks on Monday to lock up 30 per cent of new foreign-currency deposits for a year to curb speculation. The baht dropped the most in three years.
The Stock Exchange of Thailand index slid as much as 8.9 per cent, the heaviest in more than three years, and the baht almost doubled Monday's 0.8 per cent drop after central bank Governor Tarisa Watanagase said she was "confident" the measures would reduce inflows.
The currency, Asia-Pacific's best performer, had surged 16 per cent this year as foreign investors bought the nation's stocks.
"Foreign investors will rush to take money out as they're afraid the baht may weaken further," said Visit Tantisuthorn, Secretary General of the Government Pension Fund.
The baht climbed this year to a nine-year high amid optimism the economy would accelerate after a September 19 coup ended a political deadlock.
- BLOOMBERG
