Deputy Prime Minister and Finance Minister MR Pridiyathorn Devakula yesterday insisted to the National Legislative Assembly(NLA) that there was no political intervention for the Bank of Thailand to come up with the austere capital-control measure.

He also said that he is ready to resign if found guilty.

"If I'm totally at fault, I will certainly shoulder all the responsibility," he told the NLA, in response to a question from Samran Rodphet, a member of the assembly.

Samran yesterday commented that financial authorities acted without honour in terms of line of management. He said the measure seemed as if the Finance Minister had intervened in the Bank of Thailand and ruined the central bank's independence and integrity.

"The minister may not have realised this but as a member of the NLA, I can't accept this. Though some money has returned, it cannot recoup the lost honour. If I were the government, I would show responsibility for the Bt820-billion loss," Samran said.

"Personally, I won't pressure for the minister's resignation but I'm not sure if his political propriety remains."

Following Pridiyathorn's announcement of the policy reversal on Tuesday, after the stock exchange lost 14.84 per cent of its key index and Bt820 billion of market capitalisation, there has been suspicion that he acted on behalf of the central bank.

In his defence, Pridiyathorn said, "The measure was meant to end the export crisis. I have told them to look both ways - also to alleviate the problems. Nothing was underhanded. It's alright if I lack grace in the matter, as long as the country survives."

He insisted that intervening in the central bank is the last thing he would do, as he used to work at the central bank.

He also said that when the panic selling started in the bourse on Tuesday, he discussed with Bank of Thailand Governor Tarisa Watanagase and Securities and Exchange Commission Secretary General Thirachai Phuvanartnaranubala.

Once the market closed, he called for a meeting but Tarisa was still in Chiang Mai and could not get a flight back until 9.30am the following morning. At the time, Pridiyathorn says he believed it would be too late and Tarisa told him to proceed with the meeting on Tuesday. 

"That is not considered intervention," he insisted.

A day earlier, he said during the meeting with the SEC, brokers and commercial banks, Tarisa was on the telephone line.

Separately, Tarisa told a press conference that the central bank had maintained its independence in foreign exchange policy. She said she had discussed the imposition of the withholding requirement with Pridiyathorn prior to its implementation this week, and that he had supported the plan as a means to prevent the baht from rising further, after hitting nine-year highs.

As the capital control was reversed only a day after implementation, the Thai financial authorities also put their credibility in question. For the brokerage houses, who also have doubts about this, foreign funds that have left the bourse en masse would not return soon.

Pridiyathorn reiterated that the measure needed to be tough as the central bank has intervened in the foreign exchange market many times, but with no success. Inflows of over US$900 million a week could push the baht above the Bt35 per US dollar level, which would badly affect the export sector.

The baht yesterday hovered around Bt35.655 against the US dollar in a very thin market, down from the nine-year high of Bt35.090 early on Monday.

Despite yesterday's measures, the Thai baht remains the strongest performer among Asian currencies this year having risen more than 13 per cent since January 1, putting the shade an eight-per-cent gain by the South Korean won and gains of nearly seven per cent by the Singapore dollar, Indonesian rupiah and Philippines peso.

While the baht weakened as expected due to the measure, the stock market has not yet returned to the pre-Black Tuesday level.

After an 11 per cent gain on Wednesday, the SET index dropped 15.45 points or 2.23 per cent to end at 676.10 points yesterday, on thin turnover of Bt20.2 billion.