March 11, 1997
— Prime Minister's Residence, Bangkok, Thailand
As the solid wooden door opened and Prime Minister Muangsai Kidikaem entered the room, Finance Minister Chartchai and Central Bank Governor Warit, who had been seated on the office sofa, immediately stood up.
"Apologies for keeping you waiting after calling you here to the residence," the Prime Minister said.
"Not at all, sir. More importantly—did the meeting with the opposition leader yield any results?" Chartchai asked.
Kidikaem's brow furrowed at the question.
"They don't have any real solutions of their own, yet they continue to oppose the supplementary budget and the introduction of a consumption tax as measures to stimulate the economy. It's frustrating."
"We need the consumption tax to reduce the fiscal deficit," Chartchai stressed.
"I know that. But the timing… the situation is just too grim," the Prime Minister replied with a sigh.
Seeing that response, Chartchai's expression darkened. He could sense that one of the key pillars of their ambitious economic reform—the consumption tax—was now likely to be scrapped.
Kidikaem turned his eyes away from the finance minister's reaction, choosing to ignore it as he headed toward the sofa.
"Let's sit and talk."
Unbuttoning his jacket with one hand, the Prime Minister took the center seat. The others followed and sat down as well.
Looking visibly exhausted, Kidikaem was the first to speak.
"What's the latest on the movements of the currency speculators?"
Chartchai answered with a grim tone.
"So far, things are quiet. But we can't let our guard down. We don't know when they might strike again."
"Tch. After all the losses they took when the baht surged, they're still not backing off? Persistent bastards," Kidikaem muttered, clicking his tongue in irritation.
At that point, Governor Warit leaned forward and joined the conversation.
"Speculators are indeed a concern, but our immediate priority is to replenish the foreign reserves, which have shrunk drastically."
"How much do we have left?" the Prime Minister asked.
"Only about $18.7 billion."
Kidikaem's brows knitted tighter.
"I was told we had $19 billion before the weekend. Was I misinformed?"
"In the last couple of days, the demand for foreign exchange from both corporations and private individuals has spiked. To stabilize the exchange rate, we had to release an additional $300 million," Warit explained.
"Hmm…"
Hearing that not only had the reserves failed to grow, but had actually decreased, Kidikaem let out a troubled sigh without even realizing it.
Seeing his reaction, Chartchai cautiously offered a suggestion.
"While we can't stop companies from converting currency to pay off overseas debts, we can take action to prevent individuals from hoarding dollars for speculative purposes."
Kidikaem's eyes widened slightly as he looked at Chartchai.
"You're suggesting we restrict dollar conversions for private citizens?"
Whether it had been prearranged or not, Central Bank Governor Warit remained silent, while Finance Minister Chartchai gave a solemn nod.
"I know it won't be easy. But if we want to protect the baht, this is a necessary step."
Pressing his temple as if to ease a headache, Prime Minister Kidikaem replied.
"I just gave a national address today, saying we had repelled the speculators and that there would be no further instability with the baht. If we now restrict currency exchange, how can the people continue to trust my words?"
"But if we do nothing, we'll run out of reserves before we even reach a second round with the hedge funds. We'll be forced to devalue the baht," Chartchai countered.
"He's right. If an outright ban is too much, then at least impose a limit on individual exchange amounts," Warit added.
Despite their firm persuasion, the potential political damage was too great. Kidikaem couldn't make a decision lightly.
Arms crossed, the Prime Minister deliberated in silence for a long while before exhaling deeply.
"There are too many factors to consider. For now, let me think this over a bit more."
In the end, Prime Minister Kidikaem chose to defer the decision.
It was a pressing issue, and every dollar of the foreign reserves mattered—but the political burden was heavy. Chartchai and Warit could only wear disappointed expressions, unable to push further.
Suppressing his frustration, Chartchai changed the subject, placing a document folder from his lap onto the table in front of the Prime Minister.
Recognizing it immediately, Kidikaem's expression hardened.
"Is that the list of banks to be shut down?"
Chartchai nodded slightly, his demeanor serious.
"Yes. A total of 16 banks are in urgent need of mergers or restructuring."
"That many?" Kidikaem asked, his brow furrowed.
"Given how recklessly these banks borrowed during the boom years, the debt situation has become dangerously severe. If we don't take emergency action now, more financial institutions will face liquidity crises."
"Sigh… What a mess."
With a distressed expression, Kidikaem ran a hand down his face and asked again:
"How much will we need for the bailout?"
"We estimate at least $2 billion."
"Hmm…"
He had expected it would cost a lot, but the thought of securing such a large sum—especially when the fiscal deficit was already severe and the country was low on dollars—made Kidikaem wince with a groan.
"With the base interest rate having been sharply raised to defend the baht, debt burdens have only grown worse. That's why restructuring and bailout support for the banks are essential," Warit emphasized, joining in the plea.
Finally, Kidikaem, resigned, accepted the document.
"Very well. I'll put it on the agenda for the next cabinet meeting."
While the currency control measures were deferred, at least the restructuring and bailout plans had been accepted—and that, for now, was a relief.
Just as Chartchai was thinking that, a soft vibration came from inside Governor Warit's jacket.
"Apologies," he said, reaching for his phone.
As Prime Minister Kidikaem and Finance Minister Chartchai looked toward him, Central Bank Governor Warit flushed and lowered his head, hastily reaching to silence his phone.
"It could be something urgent—go ahead and answer it," Kidikaem said, waving a hand lightly.
"Ah, yes."
Warit retrieved the phone from his inner pocket and answered the call.
"I'm at the official residence right now. Unless it's urgent, let's tal— What? What did you say? Is that true?!"
His voice suddenly rose, eyes wide with shock. The two men exchanged puzzled glances.
"I understand. I'll call you back shortly."
As Warit ended the call, Kidikaem immediately asked,
"What happened?"
Chartchai leaned in, equally anxious, as Warit answered in a firm, grim tone.
"The hedge funds have begun attacking the baht again."
"What!"
Prime Minister Kidikaem's eyes flew open as he drew in a sharp breath.
"Is that confirmed?" Chartchai asked, startled.
Warit nodded.
"They've launched a massive sell-off in the Bangkok, Tokyo, and Hong Kong currency markets. The baht is under a full-scale assault. The exchange rate, which had recovered to 24 baht per dollar, has now plunged to 25."
Beads of cold sweat had formed on Warit's forehead as he delivered the news.
"What do we do now?" Kidikaem asked, his voice thick with panic.
Clenching both fists, Chartchai replied with a hardened expression.
"First, I need to return to the Ministry of Finance and get a clearer picture of the situation."
"Y-Yes, go at once!"
At that, both Chartchai and Warit sprang to their feet and hurried out of the office.
Left alone, Prime Minister Kidikaem restlessly rubbed his face with both hands, his anxiety plain.
"We raised the base interest rate and even tightened baht lending. It hasn't been that long—how are they attacking again already? Those bastards are relentless."
***
Plaza Hotel Penthouse, New York
Though it was late at night, Seok-won was wide awake, having gotten up at the sound of a call from Landon. Now seated on a sofa in his bedroom robe, he watched the baht exchange rate movements on his laptop.
[THB : 25.38 (+0.83)]
The rate chart showed a steep climb— Seok-won leaned back as he listened to Landon's update.
[A massive baht sell-off hit the Hong Kong forex market about an hour ago. The Monetary Authority immediately stepped in to respond.]
The Hong Kong Monetary Authority (HKMA), formed by the merging of several departments, effectively functioned as the territory's central bank.
[But this time, the sheer volume of sell orders seems to be overwhelming them, unlike last time.]
"Even in Hong Kong, their foreign reserves aren't bottomless. Of course they're going to worry about how much they have left."
[Exactly. If they keep trying to put out someone else's fire, they might just burn their own house down.]
Landon agreed with his assessment.
"I'm sure Singapore and Malaysia are in the same boat."
[As you guessed, both countries seem noticeably more cautious this time compared to last.]
"Those two nations have far smaller foreign reserves than Hong Kong. We can safely assume they no longer have the capacity to help Thailand."
[Considering that the combined intervention by the three central banks during the previous skirmish with George Soros and the hedge funds cost nearly $12 billion, it's very likely they've run out of ammunition—just as you predicted.]
That, and the fact that unlike the light jabs of last time, this current offensive had come in the form of a massive, multi-front assault worth billions of dollars launched simultaneously from Bangkok, Hong Kong, and Tokyo. The hedge funds were pushing aggressively, and the opposing coalition appeared to be buckling under the pressure.
"You never notice when you're winning, but once your strength starts to wane, that's when you start worrying about what's behind you."
Watching the baht rate continue to climb, despite the desperate defense efforts, Seokwon spoke in a calm, steady voice.
"Now that we've confirmed the coalition defending the baht is falling apart, there's no reason to wait any longer."
[Shall we start placing our bets?]
"If we want to crush Thailand's will to resist, it'll be more effective to first cut away the branches. Leave Bangkok to George Soros and the hedge funds—we'll focus our attack on the Hong Kong and Tokyo currency markets."
Finally, the command Landon had been waiting for arrived, and his voice trembled with excitement.
[How much should we stake?]
"It's a game we're certain to win. No need to hold back—go in without limits."
Hearing that they were free to pour in unlimited funds, Landon paused to take a breath—then burst into hearty laughter.
[Andrew's going to be thrilled when he hears this.]
To a trader, there was no greater joy than being given free rein to go all in on a sure win.
Still holding the phone, Seokwon gave a faint smile and said,
"Tell Andrew it's time to show what he's really capable of."
[Understood. I'll pass it on.]
After ending the call, Seok-won set the phone down on the table and stared at the baht exchange rate, which was steadily climbing as time went on. He murmured to himself,
"At this pace, they'll be lucky to last a week… no, maybe not even four days."
A bitter smile crept onto his lips.
"From the moment George Soros and the hedge funds marked Thailand as their prey… this outcome was already written."