"Sold 30 at 7.4!"
"Okay, done!"
With the New York foreign exchange market now open, the currency trading team of Eldorado Fund was in full swing under the command of team leader Tyler.
"BOT is putting in massive baht buy orders!"
Rolling up his shirt sleeves and wearing a headset, Tyler looked over at the trader who had just spoken.
"How much are we talking?"
"Just over 360 million dollars."
Tyler, who had been standing, bent forward to check the monitor in front of him as he listened to the answer.
Although the Bank of Thailand (BOT) had placed buy orders, the sheer volume of baht being dumped into the market made their efforts feel like a drop of ink in the ocean. The orders were executed almost instantly—then vanished into the tide.
After all, Eldorado Fund alone had already sold over $600 million worth of baht just that day in the New York market.
"They must know that's nowhere near enough to stop the rise in the exchange rate. Which means… they no longer have the capacity to defend the baht in any market outside of Bangkok."
It was no surprise. Hong Kong, Singapore, and Malaysia—who had previously joined forces in defense—had been forced to pull back, unable to withstand the enormous drain on their reserves. Now Thailand was on its own, and the pressure was mounting.
Sure enough, the exchange rate, which they had managed to pull back to 24 baht per dollar, had slipped again and was now heading toward 28.
Worse yet, the size of the Bank of Thailand's dollar-based buy orders was shrinking by the hour.
Looking at the monitor, which now showed nothing but baht sell orders with no sign of buyers, Tyler gave a crooked smile and muttered to himself:
"It's almost over."
***
Two days later.
Inside the Prime Minister's office in central Bangkok, three men sat in silence.
The air was thick with tension, reflecting the dire situation Thailand now faced.
Prime Minister Kidikaem, chain-smoking with nerves, ground out a half-finished cigarette into a crystal ashtray and asked:
"Is there really no other option left?"
Finance Minister Chatichai, looking worn out, responded in a weak voice from the sofa to his right.
"We've already exhausted all possible measures. We can't push any further."
"What about our request to Japan?"
Chatichai shook his head.
"We've been told that aside from rolling over existing debt held by banks like Sumimoto and Sanwa, there will be no government-level bailout."
Japan—Thailand's last hope—had turned its back. Kidikaem could not hide his despair.
The central bank governor, Warit, looking equally grim, spoke up solemnly.
"Our remaining foreign reserves are now just around $8 billion. At this rate, they'll be gone in less than four days."
At the end of last year, they'd had $38 billion. But in their efforts to defend the exchange rate, that reserve had been drained almost entirely.
With a heavy expression, Chatichai tried to reason with the Prime Minister.
"At this point, it's not even about the exchange rate anymore. If things continue, we may be forced to declare a default."
"Haah…"
Kidikaem let out a deep sigh and rubbed his face with both hands. After a long pause, he finally spoke—reluctantly.
"So if we move to a floating exchange rate system… that would solve everything?"
Chatichai leaned forward and answered:
"It would allow us to stop defending the baht, which means we could preserve our remaining reserves. But considering the $45 billion in short-term foreign debt due within a year, we'd still need the support of the IMF to fully overcome this crisis."
"Do we really have to go begging to the IMF?"
Upon hearing this, Prime Minister Kidikaem's expression darkened. His reluctant, negative attitude was clear.
A devaluation of the baht was already a significant political blow, but accepting an IMF bailout would be catastrophic—it would all but guarantee the collapse of the coalition government and, more critically, the end of Gidikaem's own political career.
Sensing this hesitation immediately, Finance Minister Chatichai pressed on, trying once more to convince him.
"If we don't accept the bailout, then even with the adoption of a floating exchange rate, the effect will be limited—and worse, it could lead to even greater chaos."
Still, unable to let go of his lingering hopes, Gidikaem chose to postpone the issue.
"Let's implement the floating exchange rate system first. If the situation doesn't improve after that, then we can consider seeking IMF assistance."
Chatichai sighed heavily in his heart.
Now that they had decided to abandon the defense of the baht, they needed to untie the knot all at once. Retreating step by step would only increase the burden they'd have to shoulder later on.
But he couldn't force the Prime Minister to request the bailout, so he could only exhale quietly, keeping his frustration to himself.
Across from them, Governor Warit also shook his head with a troubled look on his face.
Hoping they wouldn't spiral into the worst-case scenario, Chatichai reached into his inner jacket pocket and pulled out a white envelope, placing it on the table in front of the Prime Minister.
"What's this?"
Kidikaem asked with a frown between his brows.
Chatichai, with the calmness of someone who had already come to terms with everything, replied:
"My resignation letter."
"What are you saying?"
Kidikaem furrowed his eyebrows at him, but Chatichai continued, his tone composed.
"Just days ago, I swore there would be no devaluation of the baht. If I suddenly reverse that stance, won't the people respond with outrage and blame?"
"..."
"To calm the public and bring order to this chaotic situation, someone will need to take responsibility for the failure to defend the baht."
Understanding the implication behind his words, Kidikaem folded his arms and quietly regarded the finance minister.
"So you're saying you'll take responsibility for the devaluation… and resign?"
"That's right."
Finance Minister Chatichai replied with a bitter expression.
"As the head of the Finance Ministry, I do bear responsibility for failing to prevent the speculative attacks and allowing this crisis to unfold."
Everyone knew that the speculative onslaught was triggered by a burst economic bubble that had been inflating since the previous administration—sparked by the yen's depreciation and a global economic slowdown.
In truth, Minister Chatichai had been working tirelessly behind the scenes to reform the ailing Thai economy long before the crisis erupted.
Prime Minister Kidikaem was well aware of that. But if Chatichai resigned and took the blame, it could help deflect at least some of the public criticism aimed at him. That made it all the more difficult for him to reject the resignation outright.
After a brief silence, Kidikaem let out a small cough and accepted the letter Chatichai had offered.
"If that's your final decision… I suppose there's nothing I can do. You've done well."
Though he'd anticipated this outcome, Chatichai couldn't help but let out a dry smile—there hadn't even been a token attempt to dissuade him.
'Now the real challenge begins.'
Relieved of the heavy burden that had been weighing down on his shoulders, he felt a momentary sense of lightness. But that was quickly replaced by the suffocating anxiety over what lay ahead for Thailand's economy.
***
Later that night
In a spacious penthouse bedroom, Seok-won stirred awake to the piercing sound of his cell phone ringing.
Groaning, he rolled over and picked it up from the bedside table.
"Hello?"
[Boss. It's me.]
It was Landon on the other end.
Seok-won glanced at the Rolex watch on the nightstand—just past 4 a.m.
"What's going on at this hour?"
His voice, lower than usual from sleep, came out in a slow drawl.
[The Bank of Thailand just announced they're abandoning the fixed exchange rate system pegged to the dollar.]
In an instant, Seok-won was fully awake. He sat up straight, his brows shooting up.
"Are you serious?"
[Yes. CNBC is running the breaking news right now. You can check for yourself.]
Seok-won climbed out of bed, grabbed the remote from the table, and turned on the large TV mounted on the wall.
Right on cue, Prime Minister Kidikaem was on screen, holding a press conference.
[…And for these reasons, we have decided to abandon the multi-currency basket system tied to the U.S. dollar and shift to a floating exchange rate.]
Momentarily pausing as camera flashes lit up the room, Kidikaem resumed, his face solemn.
[Furthermore, we will implement a 10% cut in the national budget to enforce fiscal austerity. We will also consolidate 16 struggling domestic banks to stabilize the financial market. And to attract foreign investment, we will raise the benchmark interest rate from 19.5% to 21% effective immediately. We understand these measures will be painful in the short term, but we ask for your trust and cooperation as we work to stabilize the economy.]
As he concluded his statement, reporters leapt from their seats and began shouting questions—but Kidikaem, along with Central Bank Governor Warit, exited the stage without answering a single one.
The screen shifted back to the studio, where a blonde anchor summarized the Prime Minister's announcement.
Watching all this unfold, a smile crept across Seok-won's lips.
"How's the forex market reacting?"
At Seok-won's question, Landon responded with the excitement of someone who had been waiting to deliver explosive news.
[As soon as the announcement was made, the baht plummeted from 27.70 to 32.55 against the dollar—that's a massive 19.6% drop!]
With the Bank of Thailand completely withdrawing from currency defense, such a freefall in the baht was inevitable.
[The sudden announcement by Prime Minister G
Kidikaem caught Thai companies off guard, and they're scrambling to buy up U.S. dollars. It looks like the baht will continue to slide for a while.]
"Well, with over 45 billion dollars in short-term foreign debt due within the year, Thai corporations and banks must be desperate to secure dollars."
[That seems to be fueling fears of a default. Thai government bonds are nosediving in the bond markets right now.]
"It makes sense. They've got more debt to repay than they have in foreign reserves. That kind of imbalance is bound to spark concerns."
Even if the collapse of the fixed exchange rate was inevitable due to the depleting reserves, hoping that a simple interest rate hike would attract foreign capital back—without seeking help from the IMF—was overly optimistic.
'This is what they mean when they say you're using a shovel when a hoe would've sufficed.'
The Korean government had also dithered in the face of speculative attacks, letting the situation spiral out of control. Seok-won knew they were in no position to mock others.
But one thing was clear: the baht was far from hitting rock bottom.
His eyes gleamed as he adjusted his grip on the phone.
"Tell them to hold the short positions on the baht. There's still more to squeeze out."
[Understood.]