The Thai baht that gained against the dollar in early Tuesday Asian trading reversed direction after hitting a high of 35.26 at 8:45 pm ET. Currently, the dollar-baht pair is worth 35.3850, compared to Monday's close of 35.3550. If the Thailand currency drops further, it is likely to target the 35.48 level.

Thailand's economy could contract 3 percent this year, Finance Minister Korn Chatikavanij warned yesterday. The minister said the economy may shrink 8 to 9 percent this year if the government does nothing and the number of unemployed may increase to 2 million.

Korn said the situation has changed and the Thai economy is not in good shape. In 2008, the economy grew 2.6 percent, down from 4.9 percent recorded in 2007. The country's state planning agency forecast 2009 economic growth to be in a range of 0 to minus-1 percent.

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