KAI RYSSDAL: The market story of the day came and went before most people in New York were even awake. The Thai stock market dropped 15 percent today. Other Southeast Asian indices fell right alongside. Mostly on a huge sell-off by foreigners. They bailed out in droves after the Thai government put sharp limits on overseas investment. Bangkok's already overturned part of that law to help stop the bleeding. But Marketplace's Alisa Roth reports the damage might already be done.
ALISA ROTH: Under the new rules, foreign investors have to put 30 percent of their money into a non-interest bearing account for a year. Take the money out sooner and only two-thirds will get returned.
Yesterday, right before the law was enacted, Thailand's currency hit a nine-year high against the dollar. For some economies, a strong currency would be good news.
Eurasia Group analyst Roberto Herrera-Lim says not so in Thailand.
ROBERTO HERRERA-LIM: If you keep on strengthening your currency, a shirt that you're exporting that costs maybe $4, a few weeks later if there's a strong appreciation now costs $4.50.
Foreign investors have been pouring money into Southeast Asian markets recently. Among other things, they're trying to take advantage of the region's tremendous growth.
But that flood of investment dollars isn't necessarily what those countries want.
HERRERA-LIM: They would prefer to some extent that their currency stay where it is or even weaken, so that their exports become more competitive.
Thailand's government was overthrown in a coup this fall. Johns Hopkins professor Bridget Welsh says this ruling on foreign investment is a nationalist statement by the country's new leaders.
BRIDGET WELSH: In a sense, this is part and parcel of these changes that are taking place in Thailand now isa€¦whose interests will be given a favorable environment?
The answer, in part, seems to still include foreign investors. After the massive stock sell-off today, the government retracted part of the rule. And now investors in Thailand's markets may invest freely as before.
In New York, I'm Alisa Roth for Marketplace.