Dealers hold counterparty limits despite ongoing Thai instability

Impact of US taper on emerging markets more significant than domestic political troubles

International banks active in Thailand have not yet reduced counterparty limits with domestic institutions despite the country's latest bout of political violence, with market participants instead pointing to further tapering by the US Federal Reserve as the greater current threat.

Last week the Bank of Thailand warned of a "substantial risk" to the economy from a failure to resolve continuing political instability, however market participants say that international bank financial institution