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. Last Updated: 07/27/2016

Resignation Boosts Low Thai Market

BANGKOK, Thailand -- Thai financial markets surged Tuesday after the resignation of Prime Minister Chavalit Yongchaiyudh, but the ruling coalition struggled to find a replacement.

Chavalit presided over what he said was his final cabinet meeting with coalition colleagues after succumbing Monday to months of pressure to stand down.

The coalition agreed late Monday to ask elder statesman Prem Tinsulanonda to take over, after former prime minister Chatichai Choonhavan, who heads the second largest coalition party, the Chart Pattana, refused the post.

But Prem, the longest-serving prime minister in Thailand's democratic history, also turned down the post, a source in Chavalit's New Aspiration Party said late Tuesday.

The source said the government would turn back to Chatichai in a bid to keep the six-party coalition together.

No confirmation of the comments -- made on the sidelines of a party meeting late Tuesday -- could be obtained from other party or government sources.

Thai financial markets bounced back after Chavalit said he would submit his resignation on Thursday to King Bhumibol Adulyadej. The baht surged 5.5 percent against the dollar and the stock market soared 6.9 percent.

The Bangkok Post said Chavalit's decision gave "cause for celebration," although the mass circulation Thai Rath lamented that the "damage to the economy is already done."

But newspapers gave a lukewarm reaction to the idea of Prem taking over and called for opposition leader Chuan Leekpai to be allowed to form a government.

Amidst the political uncertainty, parties began horse-trading to take over from Chavalit, who faced bitter criticism of his handling of Thailand's economic crisis.

Chavalit refused to be drawn on who would take over, as he arrived for the cabinet meeting at Government House. He said the choice of the new leader was up to the coalition and parliament.

The Chart Pattana and the main opposition Democrats were considering forming a new government, party sources said.

Chart Pattana officials said the "party would hold talks" with the Democrats on setting up a government if Prem demurred.