Baht Falls As Stocks Tumble On Political Unrest

Thailand’s baht fell to a three-year low and stocks dropped on concern prolonged political unrest will damp investment and hurt the economy.

More than 1,000 anti-government protesters have surrounded Prime Minister Yingluck Shinawatra’s home in Bangkok, as she criticized the opposition Democrat Party’s plan to boycott a Feb. 2 election. Suthep Thaugsuban, who is leading the demonstrators, has vowed to thwart the polls, which were announced after Yingluck dissolved the parliament on Dec. 9 amid mass protests. The Thai currency has lost 4.6 percent in the past two months as the main stock index dropped 9.1 percent.

“Investors aren’t buying the Thai baht if this political situation continues,” said Kozo Hasegawa, a foreign-exchange trader at Sumitomo Mitsui Banking Corp. in Bangkok. The baht may gradually weaken toward 32.9 per dollar as the political conflict threatens the economy, he said.

Bloomberg

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