S'pore helps save Thailand's baht

S'pore helps save Thailand's baht

BANGKOK (AFP): The central Bank of Thailand said yesterday that it had jointly intervened with the Monetary Authority of Singapore to save the baht from speculative attack.

"Today the Bank of Thailand and the Monetary of Singapore jointly intervened in the foreign exchange market to stabilize the value of the Thai baht," the central bank said in a statement.

It said the operation was aimed at "stemming excessive speculative activities which may lead to disorderly conditions in the Thai and regional financial markets."

Despite the intervention, the U.S. dollar rose to 26.07 baht as of 0745 GMT from 25.90 on Tuesday.

Meanwhile, the Stock Exchange of Thailand index was down 5.6 percent at 566.34 points at 3:20 p.m. (0830 GMT).

The Bank of Thailand statement said without elaborating that "other appropriate measures will be taken as necessary."

Dealers from European and American finance houses in Singapore said that the Malaysian, Thai, Singapore and Hong Kong central banks were in the market to buy the Thai currency against the greenback.

Bank of Thailand assistant deputy governor Siri Garncharoendee told AFX-Asia, an AFP-affiliated financial news wire, that the Thai central bank intervened in the foreign exchange markets, but could give no figures.

"It is normal central bank procedure to support and stabilize the currency when required," Siri said.

"The rumors of a baht devaluation appear to have sprung from the rumors of a possible change in the government economic team," he said.

Thai Prime Minister Chaowalit Yongchaiyudh sparked a 2.4- percent slide on the SET Monday after announcing last weekend that he would take over control of the Thai economy from Finance Minister Amnuay Virawan.

He later backtracked on the pledge, but analysts said his comments dented already battered confidence in the Thai economy.

A Banque Indosuez currency dealer in Bangkok said the baht was under attack on continuing rumors of a devaluation or an adjustment in the trading band, with the slide in the stockmarket adding to the negative sentiment.

"After a respite yesterday amid bearish action on major currencies, selling for dollars intensified today on the weaker SET and the expectation that the index will fall further," he said.

Thailand's baht troubles are one of a string of problems facing the economy after years of rapid growth.

Confidence in the Thai economy has been hit over the past two years by slowing export growth, a massive current account deficit and slumps on the stock and property markets.