Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below. Just click on the icons to get to the download page. During those times, currencies like the Indonesian rupiah, Philippine peso and Chinese yuan, for example, were heavily depreciated because of a stronger US dollar. Luckily, the turbulence only lasted during the first half of as the greenback lost its might toward the end of the year. Any member country could withdraw 20 percent of the maximum amount if the International Monetary Fund IMF did not support them, known as the IMF de-linked portion, whenever they face any balance-of-payment problems.
What Caused East Asia’s Financial Crisis?
Asian Financial Crisis – Parliament of Australia
Asian financial crisis , major global financial crisis that destabilized the Asian economy and then the world economy at the end of the s. The —98 Asian financial crisis began in Thailand and then quickly spread to neighbouring economies. It began as a currency crisis when Bangkok unpegged the Thai baht from the U. In the first six months, the value of the Indonesian rupiah was down by 80 percent, the Thai baht by more than 50 percent, the South Korean won by nearly 50 percent, and the Malaysian ringgit by 45 percent. Significant in terms of both its magnitude and its scope, the Asian financial crisis became a global crisis when it spread to the Russian and Brazilian economies.
The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July and raised fears of a worldwide economic meltdown due to financial contagion. Capital flight ensued, beginning an international chain reaction. At the time, Thailand had acquired a burden of foreign debt that made the country effectively bankrupt even before the collapse of its currency. Indonesia , South Korea , and Thailand were the countries most affected by the crisis. Hong Kong , Laos , Malaysia and the Philippines were also hurt by the slump.
The beginning of the Asian financial crisis can be traced back to 2 July This became the trigger for the Asian currency crisis. Within the week the Philippines and Malaysian Governments were heavily intervening to defend their currencies, while Indonesia intervened and also allowed the currency to move in a widened trading range-a sort of a float but with a floor below which the monetary authority acts to defend the currency against further falls. By the end of the month there was a 'currency meltdown' during which the Malaysian Prime Minister Mahathir attacked 'rogue speculators' and named the notorious speculator and hedge fund manager, George Soros, as being personally responsible for the fall in value of the ringgit.