Tarisa says BoT created 'uncertainty'

The Bank of Thailand deliberately created "uncertainty" in the foreign exchange market to drive out speculators from Japan and the U.S. when it imposed curbs on investment, governor Tarisa Watanagase told Bloomberg in an interview Monday 15 January.
The Bank of Thailand deliberately created "uncertainty" in the foreign exchange market to drive out speculators from Japan and the U.S. when it imposed curbs on investment, governor Tarisa Watanagase told Bloomberg in an interview Monday 15 January.

``It was important and necessary for us to put a brake on the sentiment, to create some uncertainty,'' Tarisa said in an interview in Bangkok Monday.

The Bank of Thailand triggered a slump in Thai stocks, bonds and the currency when it imposed penalties on early withdrawals by investors in Thai assets on Dec. 18.

Tarisa said the bank had to act when the baht came ``precariously close to breaking the 35 mark'' against the dollar, and that controls will stay as long as speculators threaten to drive the currency higher.

Buying of the baht came mainly from Japan and the U.S., Tarisa said. There was no fundamental economic reason to justify the increase, she said.

``I've been criticized for taking the market by surprise by taking unconventional methods, especially capital controls,'' Tarisa said. ``Conventional wisdom works only when you are in a conventional environment.''

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