Asian Financial Crisis
Causes, Impact, and International Response
The Asian financial crisis was initiated by two rounds of currency depreciation that began in early summer 1997. The first round was a precipitous drop in the value of the Thai baht, Malaysian ringgit, Philippine peso, and Indonesian rupiah. As these currencies stabilized at lower values, the second round began with downward pressures hitting the Taiwan dollar, South Korean won, Brazilian real, Singaporean dollar, and Hong Kong dollar. In countering the downward pressures on currencies, governments have sold dollars from their holdings of foreign exchange reserves, bought their own currencies, and raised interest rates to foil speculators and attract foreign…
