Bangkok--20 Sep--Moody's Investors
Moody's Investors Service said today that the military coup in Thailand should to a large extent be viewed as primarily a domestic political development, rather than as a financial development.
Any financial consequences, for example, in terms of changes to government economic policies, would only materialize in time. If the coup clears the way for the scheduling of elections on a timely basis (as has been reported), then the political situation could rapidly normalize. Moody's said that the recent political paralysis in Bangkok had so far prevented constitutional institutions from establishing a firm election date.
The rating agency also said that it is still too early to determine the economic policy platform of the new government. However, much of the opposition to Prime Minister Thaksin Shinawatra had exhibited a somewhat populist strain, which could, if taken further, impede Thailand's ability to attract foreign investment. At the same time, Thailand's level of official foreign exchange reserves is high, so there is no immediate risk of an external payments problem, even if the political situation deteriorates further.
Any rating impact would most likely hinge on additional information concerning the new government's economic policies.
Moody's currently assigns the following ratings to Thailand:
Foreign and local currency government bond ratings: Baa1
Foreign currency country ceiling: A3
Foreign currency deposit ceiling: Baa1
Local currency deposit ceiling: Aa2
Local currency bond guideline: Aa2
Moody's said that Thailand's rating outlook is currently stable, but subject to change in accordance with further developments.
New York
Vincent J. Truglia
Managing Director
Sovereign Risk Unit
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Thomas J. Byrne
VP - Senior Credit Officer
Sovereign Risk Unit
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653