Concerns raised over capital flight amid North Korea face-off

“It is a global issue and we have to watch how it will develop further, but I believe that the concerned parties will exercise restraint,” he said.
However, Thailand has to brace for any impacts on the economy, he added.
Foreign Minister Don Pramudwinai yesterday said he was unconcerned about the situation affecting Thailand or Thai citizens in South Korea. He said there was currently no need to issue warnings for Thais living in South Korea or those travelling to that country or Japan.
He said the tensions had subsided and he was confident that the situation would not affect Thailand or Thai nationals.
Meanwhile, Sorapol Tulayasathien, director of the economic stability analysis division at the Fiscal Policy Office, said the Finance Ministry had kept a close eye on oil prices and capital flows, which could have a big impact on the economy should the tensions on the Korean Peninsula escalate.
However, he said there were two factors helping to calm the markets after oil and gold prices went up over the past few days.
The first one is the failure of Pyongyang’s most recent missile test, which indicates that should war break out it could be contained, since North Korea may not have the capacity to strike back at the United States.
The second factor is the latest change in the US stance, which indicates that it wants China to play a leading role in dealing with the North Korean regime. That contradicts US President Donald Trump’s earlier statement that the US would deal with North Korea alone, and its deployment of warships to the region.
Sorapol said that if the situation deteriorates, it could lead to capital outflows from the East Asian region, including Thailand. 
The impact on capital flows, however, may not be severe, since Thailand has US$200 billion worth of international reserves, ample compared with its foreign debt.
Moreover, foreign investors do not hold many Thai stocks or bonds, so the country’s capital market has low exposure to foreign obligations compared with other emerging markets, he said.
Nopporn Thepsitha, president of the Thai National Shippers’ Council, warned that exporters had to prepare for the worst-case scenario since high uncertainty remains, as North Korea has vowed to test a missile every week. 
And Trump could resort to a military option at any time, as he did bomb Syria and Afghanistan last week, Nopporn added.
Moreover, terrorists could retaliate against Americans anywhere in the world, which would also increase tensions.
“Geopolitical tensions have a potential to dampen both trade and investment globally, and we may also see Trump move aggressively on the trade front against Thailand and other countries that have trade surpluses with the US,” Nopporn said.
Meanwhile, the Bank of Ayudhya forecasts that the baht will move in a range of 34.10-34.45 per US dollar this week, compared with an average of 34.49 last week.
Among regional currencies, the bank expects the yen to see the most appreciation amid rising global risks, while gold and bonds gain attention sporadically