Thailand’s Baht Slides After Finance Minister Unexpectedly Quits

(Bloomberg) -- The Thai baht declined after the nation’s finance minister unexpectedly quit less than a month into the job, injecting uncertainty into an economy devastated by the coronavirus pandemic.

The currency declined as much as 0.8%, the most since July, to 31.301 against the dollar. It was at 31.235 at 9:20 a.m. local time.

The resignation of Predee Daochai, a former co-president of Kasikornbank Pcl, comes as the government is trying to overcome what will likely be a record economic contraction. Predee told Thai-language newspaper Krungthep Turakij that he quit due to health reasons, and there wasn’t any conflict with other government leaders.

“The abrupt resignation of Thailand’s finance minister would undoubtedly have added uncertainty to the economic landscape,” said Howie Lee, an economist at OCBC Banking Corp. in Singapore. “I expect the baht to stabilize if a replacement can be found quickly.”

The Finance Ministry has predicted an 8.5% economic decline this year as the nation’s key growth drivers of tourism and trade slump. While the government has announced stimulus worth $60 billion and the central bank lowered interest rates to a record low, it may take the economy at least two years before returning to the pre-pandemic level, according to the Bank of Thailand.

“A quick appointment of a new finance minister, whose competency and merit must be acceptable to the public, is needed,” said Win Phromphaet, Bangkok-based chief investment officer at Principal Asset Management Co. “The new finance minister must also have full and independent authority in implementing economic policies.”

©2020 Bloomberg L.P.