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Thailand Timeline May 21 -- Thai stocks rallied after the central bank announced that it would cut interest rates. May 26 -- Stocks fell for four days running in the wake of the central bank's failure to cut a key government rate, as promised. Financial companies led the charge downward as they suffer the most from lower interest rates. The prime lending rate sits at 13%, close to a six-year high. June 5 -- Thai stocks fell to their lowest level in six and a half years as the country's only credit agency downgrades the debt of every bank and finance company because of rising loan defaults. Interest rates are pressuring highly leveraged companies. June 13 -- The central bank's decision to tighten currency restrictions and forbid investors to take proceeds out of the country in the local currency has pushed Thai stocks down for four days in a row to hit an eight-year low. With foreign capital less likely to flow into Thailand, investors are concerned that heightened demand for domestic capital could cause interest rates to rise and staunch economic growth. June 19 -- Finance Minister Amnuay Viravan resigned today following harsh criticism of his economic policies. Stocks fell for the eighth day running. July 2 -- Thai stocks surged after the government decided to devalue the currency. Investors piled in on hopes that the devaluation of the baht would give the country room to reduce interest rates, shoring up economic growth prospects. July 11 -- The short-term euphoria over the devaluation ends as the baht-dollar exchange touches record lows. The weaker baht hurts those who have borrowed money denominated in foreign currency by making it harder for them to make interest payments. July 28 -- Thai stocks rallied after the government said that it would seek an economic rescue package from the International Monetary Fund (IMF). August 5 -- Thailand's government ordered 42 teetering non-bank finance companies to start to merge with each other or face being shut down. The companies have 60 days to present a detailed plan. This is one of the many requirements of the multi-billion dollar Thai rescue package. August 6 -- The government's decision to shut down more than half of the country's finance companies triggered a run on deposits for those that remained open, pushing stocks down lower. August 19 -- The International Monetary Fund-driven decision to cut government spending and increase taxes had investors worried about corporate profits collapsing. August 28 -- Thai stocks continued to be pounded after the government warned that the country's economy would probably remain in the dumper for at least two years. Foreign reserves were bled down to their lowest level since 1994, making it increasingly difficult to support the currency. October 7 -- Stocks fell as political turmoil caused investors to grow increasingly concerned about whether measures to turn the country's economy around would be put into place. The Thai Cabinet delayed a decision to cut the 1998 budget for third time. October 17 -- As corporate growth slows and the currency continues to collapse, stocks sell off as investors worry about companies that have debt denominated in foreign currency. The government lowered its forecast for overall economic growth. October 20 -- Finance Minister Thanong Bidaya resigned, causing stocks to fall due to a collapse in confidence that the government could get the economy moving again. October 24 -- Stocks fell as Moody's cut Thailand's sovereign credit rating for the third time this year. Investors became pessimistic that a political solution to the mounting crisis appeared likely.
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