The Central Bank of Thailand has just announced that the Capital Control Policy will be adopted to prevent the foreign investors from withdrawing their capitals out of Thailand within the 1st year of investments. As an result, the Stock Exchange of Thailand Index dropped more than 10% just after the announcement. Furthermore, such decision had also given a very bad impact to most of the Asian stocks, including KLSE. KLCI had dropped 26.22 or 2.42% to 1055.38 (Note: till 3.36pm). Anyway, KLCI had adjusted afterward and closed at 1060.36 (i.e. dropped 21.24 on 19 Dec 2006).
Capital control is the monetary policy device that a country government (ie Sovereign power) uses to regulate the flow of investment-oriented money into and out of a country or currency.
