http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/249041/1/.html Thai central bank admits currency control error Posted: 25 December 2006 1333 hrs
BANGKOK: The Bank of Thailand said on Monday it has underestimated the impact of its draconian currency controls on the stock market, which is reeling from last week's record losses. "We anticipated a certain impact for the (stock) market. But we didn't expect it to be this much," central bank governor Tarisa Watanagase said in an interview with the English-daily Bangkok Post published on Monday. The Thai stock market nosedived 15 percent, the biggest one-day drop by value in the 31-year history of the bourse, on Tuesday due to panic selling over the currency rules imposed to curb the Thai baht's rise. Facing the stock losses amounting to a staggering 23 billion dollars on the day, Finance Minister Pridiyathorn Devakula backtracked on the capital measures, which only took effect on Tuesday, in an embarrassing policy U-turn. "The lesson that we have learned is that market panics occur more than we thought, that the herd mentality of investors is strong," said Tarisa, the first woman to head the central bank. "We will need to consider investor psychology more," said the governor, who took the helm of the Bank of Thailand in October after Pridiyathorn left the top job to join the military-backed government as finance minister. - AFP/so
