The baht, government bonds and stocks dropped this week over concerns that plans to push forward an amnesty bill for those accused of crimes during the 2010 crackdown on political protesters will trigger renewed tensions.
The benchmark SET Index of shares fell by the most in six weeks Thursday and slumped 1.8% from July 19 after confirmation that an amnesty bill will be tabled for consideration by parliament in August.
The Pheu Thai Party agreed on Wednesday that the first amnesty bill to be debated by the House when it resumes would be the draft legislation presented by Pheu Thai MP for Samut Prakan Worachai Hema.
Parliament now has five amnesty bills to consider, including the one engineered by Mr Worachai. Relatives of victims of the 2010 political violence are also proposing a people's amnesty bill, which would raise the number to six.
Exports fell 3.4% in June from a year earlier, following a 5.3% decline in May, official data showed Friday, amid concern an economic slowdown in China will hurt overseas sales.
Any concern with regard to the political situation hurts the baht and Thai assets, said Tohru Nishihama, an economist covering emerging markets at Dai-ichi Life Research Institute Inc in Tokyo.
The baht fell 0.2% this week to 31.1 per dollar as of 3:33 pm in Bangkok and touched a one-week low of 31.17 earlier, according to data compiled by Bloomberg. It was unchanged Friday after declining 0.5% on Thursday. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped 34 basis points this week to 6.38%.
According to a DBS Vickers research note released Thursday, proposals for an amnesty bill are negative for stocks and could lead to another round of demonstrations.
The drop in exports compared with the median estimate in a Bloomberg survey for a 1.6% increase.
A Purchasing Managers Index from HSBC Holdings Plc and Markit Economics this week showed a preliminary reading for Chinese factory output of 47.7 in July, compared with a forecast for 48.2. China took 11% of Thai exports in the first half of 2013 and shipments to Asia’s largest economy slumped 17% in June, official data show.