BANGKOK: Thailand’s currency slumped to a six-year low on Tuesday and shares fell in Bangkok over concerns an unprecedented attack in the capital could hit the vital tourism sector.
At least 21 people were killed and more than 120 wounded when a bomb ripped through a Bangkok religious shrine late Monday, in what authorities said was the worst ever attack on Thai soil and targeted at foreigners.
The baht fell to 35.536 against the dollar on Tuesday morning, touching its lowest point since April 2009.
Bangkok shares slumped as much as 2.8 percent in opening deals, their steepest decline this year, before paring losses to a fall of 1.7 percent by late morning.
Tourism-linked companies led the selloff, with Airports of Thailand plunging 6.27 percent while Central Plaza Hotel tumbled 8.61 percent.
“Thailand is vulnerable right now as economic growth and corporate earnings are weak, while tourism is not doing great,” Andrew Stotz, CEO of Bangkok-based Stotz Investment Research, told Bloomberg News.
The timing of the blast just as “we’re coming into this high tourism season” means it could be particularly damaging to the sector, which accounts for 8.5 percent of GDP, he added.
Police said two Chinese, two Hong Kongers, two Malaysians and one Singaporean were among those killed in the attack on the Erawan shrine in the heart of Bangkok’s tourist and commercial center.
Morgan Stanley said big-spending Chinese tourists — whose numbers have soared in recent years, bucking a general downtrend — are particularly likely to be put off by the unrest.
Last year around 4.6 million Chinese nationals visited the kingdom, with the average tourist spending 5,500 baht ($155) per day, more than the average European visitor.
The attack comes after Thailand’s economy slowed in the second quarter, hit by weak domestic demand and exports, with growth expected to be hampered this year by China’s devaluation of the yuan.
Gross domestic product grew 2.8 percent between April and June compared to a year earlier, official data showed Monday, slowing from three percent in the previous quarter.
Hours before the blast, Thailand’s planning board trimmed its 2015 growth forecast to 2.7-3.2 percent, down from 3.0-4.0 percent.
It also warned growth faces “major constraints” after China devalued the yuan last week, sparking fears of a currency war in Asia in which countries vie to keep their exports competitive by depreciating their units.