The Asian Crisis was a major global financial crisis that destabilized the Asian economy and then the world economy at the end of the 1990s[2][3][5][6]. Here are some key points related to the Asian Crisis:
- The crisis started in July 1997, when Thailand stopped defending the baht after months of downward market pressure, causing the currency to fall quickly[3][5].
- The contagion spread quickly, with currencies across the region falling—some quite catastrophically[3].
- The crisis was rooted in economic growth policies that encouraged investment but also created high levels of debt (and risk) to finance it[3][5].
- Some of the macroeconomic problems included current account deficits, high levels of foreign debt, climbing budget deficits, excessive bank lending, poor debt management, and weak financial regulation[3].
- In all of the countries at the center of the financial turmoil, its consequences have taken the form of a substantial shrinkage of investment and consumption[1].
- The underlying causes of the Asian crisis have been clearly identified, including substantial foreign funds becoming available at relatively low interest rates, as well as poor debt management and weak financial regulation[4].
- The International Monetary Fund (IMF) bailed out many countries but imposed strict spending restrictions in exchange for the help[3].
- The countries that were most severely affected by the Asian Financial Crisis included Indonesia, Thailand, Malaysia, South Korea, and the Philippines[5].
- The impact of the Asian Financial Crisis was not limited to Asia, as international investors became affected[5].
- The events that came to be known as the Asian Financial Crisis generally caught market participants and policymakers by surprise[6].
- The Asian Crisis led to significant changes in the way the IMF and other international organizations approach financial crises[1][6].
Citations:
[1] imf
[2] britannica
[3] investopedia
[4] imf
0 comments:
Post a Comment