However, the expensive miscue in the capital markets has raised questions about the military-installed government's ability to keep the country on an even keel, analysts said Wednesday.

The flip-flop and a steady performance on Wall Street overnight had investors chasing bargains following Tuesday's sell-off amid chaos in Thailand and echoes of the 1997 Asian financial crisis.

The capital controls were reminiscent of the 1997-98 Asian financial crisis when excessive borrowings in US dollars coupled with high interest rates forced the Thai government to float the currency. The Baht then promptly collapsed along with the economy and the contagion spread across the region.

Central bankers and governments played down suggestions that their countries might follow Bangkok's latest lead and ruled out any repeat of the havoc that engulfed East Asia in the late 1990s.

Harry Su, head of research at BNP Paribas said from Jakarta the knee-jerk reaction to the controls on Tuesday was largely because of the spectre of the financial crisis in 1997 and 1998.