Thailand's currency war

Thailand is sensitive about its currency. Ever since the baht crisis matured into the Asian financial crisis in 1997, it has been paranoid about falling into the same trap, which has prompted it on several occasions to take bold action to protect its currency.

In mid-October, it did so. The finance minister, Korn Chatikavanij, made it more expensive for foreign investors to buy Thai government bonds in a vain bid to curb the baht’s relentless appreciation. Effective immediately, the withdrawal of a withholding tax exemption for foreign investors added a 15% levy on any bonds issued by the government, the Bank of Thailand and state governments.

Few expected it to achieve much, including,...