The Thai baht plummeted to its lowest in four years last week amid concerns that Thailand’s political turmoil has dealt a blow to public and private investment and the country’s economic recovery.
The Thai currency weakened to Bt33.02-33.04 against the dollar Friday, Jan 3, depreciating from Bt32.95-32.97 a day earlier.
Besides political unrest, the strengthened US economy has pushed up the dollar against other currencies.
Kittiratt Na-Ranong, caretaker deputy prime minister/finance minister, said a 67-point nosedive of the Thai bourse on Thursday, Jan. 2, and its continued decline Friday, Jan. 3 were mainly due to the political conflicts which have demoralized investors.
He said Thailand has experienced a rapid surge after a crisis in the past, citing the quick recovery after the tsunami disaster in the South in 2004 and massive floods in 2011.
Though political problems have disrupted revivals of the Thai economy and stock market, the Thai bourse – which encountered a heavy sell-off despite strong fundamentals – will rapidly pick up, he said.
Kittiratt said the weakened baht will be a boon to Thai exports but will pose a negative impact on imports of essential products, particularly crude oil.
Several state-initiated investment projects, including the Bt2 trillion infrastructure development, will be suspended, pending a ruling by the Constitution Court, while domestic consumption has slowed down, he said.
Anusorn Thammajai, dean of the Faculty of Economics at Rangsit University, said Thailand went through a capital outflow at over Bt200 billion in September-October given the political stalemate and investors’ lack of confidence.
The planned seizure of Bangkok on January 13, as announced by anti-government protesters, will give domestic and foreign investors the jitters, he said, adding that it would take over a decade to rebuild the shattered economy.