No financial consequences yet from Thailand coup

SINGAPORE – There has been no financial impact yet from the coup in Thailand, the head of the IMF said yesterday as regional officials expressed hope for a quick resolution of the crisis.

“We are following the developments very closely and we certainly have not seen up to now any financial consequences,” IMF Managing Director Rodrigo Rato said at the close of the annual general assembly of the Fund and the World Bank. The Thai baht fell against the US dollar as markets reacted nervously to news that Thailand’s armed forces had seized power Tuesday from Prime Minister Thaksin Shinawatra in a late-night bloodless coup.Ratings agency Standard and Poor’s said the coup risks paralysing policymaking and undermining the investment climate.But regional officials, speaking on the sidelines of the IMF-World Bank meeting, expressed hope the political situation will quickly stabilise without much negative impact.Philippine Finance Secretary Margarito Teves said regional fallout from the coup is unlikely.”Thailand has very sound macroeconomic fundamentals.Certainly I think Thailand will rebound and it will not adversely affect the situation in Asia,” he said.Sjamsul Arifin, of Bank Indonesia, said the stabilising influence of the revered Thai monarchy should help minimise any negative impact from the coup.Standard and Poor’s warned of a possible credit rating downgrade.Fitch Ratings also placed its ratings for Thailand on review for possible downgrade but Moody’s Investors Service showed less concern, saying the military’s move to seize power was largely a domestic political issue.The political uncertainty “will definitely shake the economic and political confidence in the region,” said Thai economist, Pattama Teanravisitsagool.Thailand’s financial markets were closed yesterday.They were expected to reopen today.AFPThe Thai baht fell against the US dollar as markets reacted nervously to news that Thailand’s armed forces had seized power Tuesday from Prime Minister Thaksin Shinawatra in a late-night bloodless coup.Ratings agency Standard and Poor’s said the coup risks paralysing policymaking and undermining the investment climate.But regional officials, speaking on the sidelines of the IMF-World Bank meeting, expressed hope the political situation will quickly stabilise without much negative impact.Philippine Finance Secretary Margarito Teves said regional fallout from the coup is unlikely.”Thailand has very sound macroeconomic fundamentals.Certainly I think Thailand will rebound and it will not adversely affect the situation in Asia,” he said.Sjamsul Arifin, of Bank Indonesia, said the stabilising influence of the revered Thai monarchy should help minimise any negative impact from the coup.Standard and Poor’s warned of a possible credit rating downgrade.Fitch Ratings also placed its ratings for Thailand on review for possible downgrade but Moody’s Investors Service showed less concern, saying the military’s move to seize power was largely a domestic political issue.The political uncertainty “will definitely shake the economic and political confidence in the region,” said Thai economist, Pattama Teanravisitsagool.Thailand’s financial markets were closed yesterday.They were expected to reopen today.AFP