World leaders paid tribute to Thailand's King Bhumibol Adulyadej as a champion of his people during a momentous seven-decade reign, as observers warned his death could plunge the country into renewed turmoil.

Bhumibol, whose reign witnessed regular bouts of political turmoil, coups and violent unrest, was revered as a serene and caring father of the nation, and a bulwark in troubled times.

His death Thursday at the age of 88, with Thailand under a military dictatorship, could cause fresh political tensions and economic hardship, analysts warned as his people come to terms with losing the only monarch most have ever known.

UN chief Ban Ki-moon hailed the king's "long dedication to his country and his legacy as a unifying national leader... respected internationally".

"The Secretary-General expresses his hope that Thailand will continue to honour King Bhumibol's legacy of commitment to universal values and respect for human rights," his spokesman said in a statement.

President Barack Obama praised the monarch as a "close friend" and partner of the United States.

He paid tribute to the king as a "tireless champion" for Thailand's development, praising his "unflagging devotion" to improving the lives of his subjects.

"I had the honor of calling on His Majesty the King during my visit to Thailand in 2012, and recall his grace and warmth, as well as his deep affection and compassion for the Thai people," he said.

Backed by an intense palace-driven personality cult, Bhumibol was revered as semi-divine by many in Thailand, and a towering leader above the din of the kingdom's fractious political scene.

In his heydey he built a reputation as a people's monarch, criss-crossing the nation to visit the rural poor and sometimes intervening to quell political violence -- although he approved most of the army's many coups during his reign.

- 'Greatly missed' -

Neighbouring Singapore and Malaysia both expressed their sorrow at his passing, with the island city-state describing the king as "an outstanding and deeply revered monarch... (who) worked tirelessly for the betterment of the Thai people".

President Vladimir Putin sent a telegram of condolence, saying that "during the decades of his reign he won the sincere love of his subjects and high prestige abroad".

British Prime Minister Theresa May said Bhumibol "guided the Kingdom of Thailand with dignity, dedication and vision throughout his life. He will be greatly missed".

Chinese President Xi Jinping hailed Bhumibol's contribution to Thailand's development, adding that the "good relationship" between Bangkok and Beijing were due in no small part to "personal efforts made by King Bhumibol himself".

Bhumibol's "rural development projects improved the lives of millions of people in Thailand" and will be remembered for generations to come, said EU President Donald Tusk and European Commission chief Jean-Claude Juncker.

Indian Prime Minister Narendra Modi tweeted: "People of India and I join the people of Thailand in grieving the loss of one of the tallest leaders of our times, King Bhumibol Adulyadej".

As concern mounted over the Bhumibol's health in the days prior to his death, the stock market and baht currency tumbled. And analysts predict further jitters ahead.

"The death of Thailand's highly revered king will plunge the country into a state of mourning, and also deep political uncertainty," forecasters Capital Economics said in a note.

"The period of (relative) political calm since the 2014 coup has helped the economy recover... But renewed political instability could quickly derail this recovery."

"Although the King has been unwell for a number of years and has had little or no influence on day-today policymaking for some time, he has continued to act as a unifying force in the country."

Advisory group Bower Group Asia said all eyes would now be on the succession. The junta leader said Thursday that the named heir, Crown Prince Maha Vajiralongkorn, has asked for time before being officially proclaimed the next monarch.

"During the mourning and transition period, the military will retain a firm grip over the country to ensure that the royal succession proceeds smoothly and does not become politicised," it said.