He said foreign investors are concerning that the central bank may introduce more measures. However, he warned them to wait and consider well the consequence before shifting their capital out of the country. Otherwise, they may lose investment opportunity.

Teerana Bhongmakapat, an economist at Chulalongkorn University, urged the central bank to cut reserve requirement of 30 per cent on capital inflows to around 3 to 5 per cent to lessen the drastic measure.

If investors pull back their money within three or six months, they would lose the reserves. If they get money back within a year, they would get half of the reserves, he said.

He said the 30 per cent reserve was too severe and it could adversely impact on both shortterm and longterm capital flow.

He, however, said the central bank move in the right direction as it has try to introduce prudential management of macroeconomy which is under threat from shortterm capital flows.

"The challenge is how the central bank could minimise the cost , the side affect coming  along with central bank's goal to curb rising baht," he added.      

At 12.12 pm, the SET index fell further by 13.74 per cent or 100.37 points to 630.18.

Key Democrat Party member Korn Chatikavanij urged the Bank of Thailand to immediately reverse the recentlyintroduced measure to intervene the currency, saying that it would cause the damages to the capital market for years. Today, Thai share prices plunged by 10 per cent at 11:30 am after the central bank took the most stringent measures since the 1997 Asian financial crisis to curb the baht's rise.

The Stock Exchange of Thailand implemented the circuit breaker measure for the first time in history to deal with the drop by suspending the trading for 30 minutes at 11:30 hours.

At 11:30, the SET nosedived to 656.49, the lowest point of the day so far. The Stock Exchange of Thailand (SET) composite index nosedived 64.62 points or 8.85 per cent to 665.93 in the first minutes of trading and the bluechip SET 50 index fell 53.10 points to 458.90.

Korn said: "The measure causes the damage to the capital market. The Bank of Thailand should immediately reverse this policy, because no investors who will want to spend Bt100 just to have Bt30 withheld. And if they will get only Bt90 if they want to remit the money in less than one year."

Starting from Tuesday, financial institutions would be required to withhold 30 per cent of foreign currencies bought or exchanged against the baht, except those related to exports, said BOT governor Tarisa Watanagase.

Korn said that the damage caused by the measures could be overwhelming. Besides, there's rule from the financial institutions that they cannot invest in countries with capital control. He said the capital market in Chile for instance was damaged by 10 years while Malaysia was damaged by 3 to 4 years.

He said Bank of Thailand should implement the separate measures to deal with money and financial capital markets. Speculators are mostly in the bond markets. Bank of Thailand should separate the measurement in money and capital markets speculators are mostly bond market.

The Nation