Thai Baht Declines, Debt Rating at Risk Amid Protests

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Thailand’s baht fell to its weakest level this month and Standard & Poor’s said the nation’s debt rating may be cut after anti-government protesters fought police and Prime Minister Abhisit Vejjajiva called a state of emergency.

The currency extended its loss in offshore trading this year to 2.5 percent as soldiers battled to restore order to Bangkok’s streets. Protesters are calling for the resignation of Abhisit, 44, who was forced to cancel a weekend summit of Asian leaders after 1,000 protesters stormed the seaside venue.

“We have a negative outlook on the government ratings because of the continuing divide in Thai politics and the lack of obvious peaceful means of resolving it,” said Kim Eng Tan, an S&P director in Singapore. “There is a significant chance of a ratings downgrade.”

Thai soldiers fired tear gas today to clear a key intersection of demonstrators, who blocked another road near the Foreign Ministry with public buses and burning tires. Continued unrest may worsen an economy facing its first annual contraction in 11 years.

Four Thai soldiers were shot in clashes with protesters in Bangkok, and 23 others were injured, Abhisit said today in a televised address to the nation. He said 47 protesters were hurt, and no one died.

From Bloomberg News.