BANGKOK, Dec 2: Thai stocks fell to near nine-year lows on Tuesday as corporates hungry for US dollars thrashed the baht and some banks hiked interest rates in a market already choked by a severe liquidity crunch.

As the baht tumbled well-below the key 41 per dollar level, the Bank of Thailand said the embattled currency had overshot its real value and appealed to exporters holding dollars to sell them.

But the plea went unheeded as corporates and importers incessantly bought dollars against the baht. The baht was quoted late at 41.65/41.75 against the dollar, sharply lower than the 40.95/41.10 seen early on Tuesday.

"And a bad sign is that normally when the baht hits the 41.00 level, there will be profit taking or selling by exporters.

But today, there were modest dollar sales... which could mean sellers believe the baht will drop further," the dealer said. The stock index finished 2.43 per cent down at 378.14, the lowest closing level since December 23, 1988. "Basically all the news is either neutral or negative," saida trader at a Thai Military Bank affiliate. "The (S Korean) won has been hammered so the baht has fallen as a reflection of that and people are getting concerned," he added.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.