Since early July, the Thai currency has remained at 10-year highs against the dollar with investors pouring money into the stock market, where share prices have gained nearly 30 percent since the beginning of this year.

The strong baht has alarmed Thailand's army-backed government as it put pressure on the kingdom's export-driven economy, which was already in a slump due to political uncertainty following a coup in September 2006.

Large money inflows also brought back bitter memories of the Asian economic crisis 10 years ago when the kingdom was forced to float the baht after coming under massive speculative pressure.

Capital had poured into Thailand during the breakneck economic growth of the early 1990s, but investors began to fear the baht was overvalued and pulled their money out.

As large amounts of capital fled out of Thailand in 1997, the baht collapsed, setting off a chain of Asian currency devaluations that crippled economies from South Korea to Indonesia.