Bangkok: Thailand's baht fell to a seven-week low, stocks slumped and bond risk climbed after at least 36 people were killed in fighting between the military and anti-government protesters.
The baht declined 0.3 per cent to 32.49 (Dh3.63) per dollar yesterday in Bangkok and touched 32.50, the weakest level since March 26, according to data compiled by Bloomberg. The cost of credit-default swaps insuring government debt rose the most in more than a year, while the benchmark SET index dropped to a two-week low following the largest withdrawal by foreign funds from stocks in almost three years.
"The situation is getting worse than expected and it will definitely have a negative impact on the economy," said Emmanuel Ng, a strategist at Oversea-Chinese Banking Corp. in Singapore.
"The political situation is probably going to add to arguments for a weakness in stocks. We will look for the dollar to move higher against the baht."
Worst political clash
Foreign funds were net sellers of 14.7 billion baht of Thai equities last week, the most since the five days ended November 23, 2007, as the nation's worst political clash in two decades escalated. More than 255 were injured since the military moved in last week to seal off an area as large as New York's Central Park occupied by demonstrators.
Thai credit-default swaps jumped 23 basis points to 170, according to BNP ParibasA, suggesting deteriorating perceptions of creditworthiness.
The increase is the biggest since March 2, 2009, according to CMA DataVision in New York.
The SET dropped 2 per cent to 753.26, the lowest since April 29.
