Thailand again?

Excerpt from FT:

Thai stocks on Tuesday suffered their biggest drop since Asia’s 1997 financial crisis after the central bank imposed draconian capital controls aimed at stemming rapid appreciation of the baht.

Thailand’s benchmark SET stock index plunged as much as 18 per cent, before recovering slightly to end 15 per cent down at 622.14. The sharp sell-off, amid investors’ concerns over possible lack of future foreign buyers, forced the stock exchange to suspend trading for 30 minutes earlier in the day, and prompted calls for the central bank to review the policies.

The measures, which force offshore investors to keep their money in the country for at least a year or face stiff penalties for early withdrawal, are aimed at dampening speculation that has sent the currency 17 per cent higher against the dollar this year.

The baht dropped dropped 1.5 per cent on Tuesday from the nine-year high point of Baht35.06 reached earlier Monday before the central bank’s announcement.

Elsewhere in Asia, stocks also fell in India, Malaysia, Indonesia and the Philippines amid heightened concerns over investing in stock markets of developing countries. Thailand in 1997 triggered the Asian financial crisis when its currency collapsed.

Brad Setser compares today's conditions with those in 1998.