Nations that experienced the Asian crisis have built up a war chest of reserves to shield their economies against the flight of hot money. The Bank of Thailand cut the baht loose on 2 July after the currency had been under sustained attack by speculators. The central bank had almost exhausted its foreign currency reserves in a futile defence of the currency, which went into a free fall after the US dollar peg was removed.
Governments in both mature and emerging economies no doubt draw lessons from financial crises in order to adopt measures to prevent their recurrence. However, it is often the case that such measures are designed to address the root causes of the last crisis but not the next one. More importantly, they can actually become new sources of instability and crisis.
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East and South-East Asian economies account for around a quarter of world merchandise trade and nearly a third of world services imports. According to a preliminary assessment of the trade implications of the Asian financial and economic crisis for developing countries contained in a note prepared by the UNCTAD secretariat for the Cairo meetingeconomic slowdown now encompasses not only those countries where an acute financial crisis has erupted since Julybut also the rest of East and South-East Asia. UNCTAD anticipates that the economic malaise emanating from the region is likely to have a far greater impact on global trade and the world economy than could be concluded by focusing only on those countries where an acute financial crisis has erupted since mid
A warning tremor on May 14 this year presaged the start of massive selling in July. By the end of September, the baht was worth At the time of the Mexican currency crisis almost three years ago, there was concern that sparks from that fire might spread to Asian currencies.
Jakarta Composite Index 6, GDP Growth Q 5. Inflation June 3.
Asian financial crisismajor 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.
The current Asian economic crisis threatens to wipe out the gains from recent years of economic growth, poverty alleviation, and human development in many developing Asian countries. It has significantly weakened the capacity of many East Asian countries to keep a sizeable proportion of their populations from falling into abject poverty and severe food deprivation. During the past two decades, economic growth was the single, most important factor contributing to significant poverty reduction in East Asian countries, especially those in transition from centrally-planned to market economies. The sharp economic contraction in in some of these countries particularly Indonesia and Thailand has dealt a major blow to an otherwise good performance in poverty alleviation during the last quarter of the century.
Traces the economic development of Thailand sincereferring to relevant research, and analyses the reasons why it was the first Southeast Asian country to collapse in the economic crisis: large current account deficits, excessive external debt, a collapse in the property sector, exchange rate mismanagement and political instability. Considers its future prospects and shows statistics on economic growth and inflation for the world as a whole and various countries and groups within it. Julian, C.
The Asian financial crisis, also called the "Asian Contagion," was a sequence of currency devaluations and other events that began in the summer of and spread through many Asian markets. The currency markets first failed in Thailand as the result of the government's decision to no longer peg the local currency to the U. As a result of the devaluation of Thailand's baht, a large portion of East Asian currencies fell by as much as 38 percent. International stocks also declined as much as 60 percent.