The Thai economy, stock market and its currency, the Thai Baht, plummeted after the nation’s capital of Bangkok suffered a deadly bomb blast which killed at least 22 people, including nine tourists.
On Tuesday, one day after the bombing, the SET opened down 2.7% at 1,408 and closed at about 1,371. The heightened uncertainty after the Monday blasts could also be seen in the price of the Thai Baht and planned tourist arrivals to Bangkok.
The Thai baht has fallen to its weakest level in over six years. It now stands at 35.65 against the U.S. dollar, the lowest since March 2009.
Stephen Innes, a senior trader at the financial technology company OANDA, added that this new incident is just another one in the string of struggles the Thai currency has gone through. The other most recent struggle was the surprise Yuan devaluation that took place last week.
The bad news, however, does not end there. Speculations that the tourism industry would be very negatively affected are no longer just speculations. According to Thai Airways International (THAI), one in five travellers booked changed their flight plans for Thailand after the incident. The airline President, Charamporn Jotikasthira said so on Wednesday, also adding that there were no flight cancellations following the bomb blast.
With China’s economy slowing down and the possibility of the U.S. Federal Reserve raising interest rates, investors have pulled out of many emerging markets such as Thailand over the past few weeks. Interest in Thai stocks is likely to wane, negatively affecting the currency as well.
Thai Economy Hit By Bomb
The incident that occurred on Monday evening killed at least 22 people, including nine tourists, and wounded more than 120 people. The bomb went off at the Erawan shrine at a bustling central Bangkok intersection in an affluent neighborhood with upscale shopping malls and hotels nearby.
Thai authorities have already launched an investigation to bring the person(s) responsible to justice. To this day, no party has claimed responsibility.
Police later discovered video footage showing a man in a yellow shirt leaving a backpack in the Erawan shirne, the backpack is believed to be the source of the explosion. The suspect did not have the appearance of a Thai and the details of the bombing were “quite different” from the frequent bombings previously carried out by southern Thai insurgents.
Major General Weerachon Sukhontapatipak said that no motive was being ruled out just yet and that they were close to identifying the suspect.
The Monday blast is connected to another incident on Tuesday in which a smaller but similar explosive was thrown. The bomb was aimed at a busy walking platform leading to the Sathorn pier but missed and exploded in the water. There were no injuries or damage.
Police General Somyot said that this was definitely an organized activity that involved both Thais and foreign nationals.
“I can tell you now that there are not only foreigners involved in the incidents but some Thais must have taken part,” the police chief said. Foreigners, he said “could not have … walked their way onto the [Taksin] bridge. There must be Thai people involved whose hearts are not Thai.”
The Sathorn bombing took place at 1.20pm, but half the pier remained open with the boats operating as usual. The Sathorn Road was closed off to traffic from the pier to the Saphan Taksin Skytrain for further investigation.
Further analysis revealed that the two bombs were of similar type – both were pipe bombs containing TNT and most probably originated from the same group of people.
With its GDP growth rate already revised down to 3% from the previous 3.8%, Thailand faces even bigger challenges with improving its economy brought about by the 2 bombing incidents of August 17 and 18, both of which have led to a sharp drop in the stock market index, currency value, and possibly inbound tourists.