Worried over harsh measures imposed by the Bank of Thailand (BoT) aimed at curbing short-term capital inflows, Thai stock investors on Tuesday sold their holdings in volume, forcing the Stock Exchange of Thailand (SET) composite index to plummet to its lowest level since the market was set up 31 years ago.

The SET composite index plunged 108.41 points to close at 622. 14, down 14.84 percent from Monday, while the Thai baht closed at 35.85-35.90 baht to one dollar, after hitting a new nine-year high of 35.12 on Monday. The baht has risen by 14 percent since the beginning of 2006.

Foreign investors said they were concerned about the new measures imposed by the central bank while many believed that the BoT would come up with more stringent measures in future, Securities and Exchange Commission Secretary General Theerachai Puvanartnaranubala was quoted by the Thai News Agency as saying.

But, Theerachai said, foreign investors should slow down selling and wait for clarification from the central bank otherwise they may lose an opportunity to invest, adding that it would benefit stocks investors if the new measures would impact only currency speculators.

However, Theerachai said the SET may raise this issue with the BoT.

Under new BoT rules which took effect Monday, financial institutions must deduct 30 percent as a reserve requirement from short-term foreign exchange transactions against the baht.

Customers whose funds have been withheld can request a refund of the reserves after the money has been in Thailand at least one year.

Earlier Tuesday, Pridiyathorn Devakula, deputy prime minister and finance minister, said the measures would remain in place as they would help local exporters.

Source: Xinhua