Evaluate (Find) the causes of the East Asian Financial Crisis in 1997-1998
I will be talking about the causes of the Asian crisis involving the problems or issues they are undertaking during the time. (Ask audience, if anyone knows how it actually happened.) Here is what I understand how the crisis has began. Firstly, the ones affected the most were Thailand, Indonesia, South Korea, Philippines, Malaysia and so on, did not have enough foreign investment causing the value of its currencies fall tremendously. Secondly, financial sectors with each country were operating very insufficiently and creating trouble in its Asian Economies. Thirdly, the crisis effects the US and the whole world. Resulting, the role of IMF have to attempt and investigate ways to cure the crisis. (Slide 2)
Asian financial crisis happened in 1997. It first began attacked the Thailand currency, baht on May 14th and then follow by the collapse of the largest finance company in Thailand on 23rd of May. Due to the fact it has happened, the poor baht currency in Thailand has lost its currency relation with the US dollars and in fact, it has also affect other countries like Philippines peso, Malaysian ringgit and Indonesia ruppiah All these countries had to devalue their currencies by more than 30 percent towards the end of January 1998 in order to defend themselves. (Slide 3) This was only the first round of depreciation. The second round pressures Taiwan NT dollars, South Korean won, Brazilian real, Singaporean dollar and Hongkong dollar. (Slide 4)
The causes of Asian Financial Crisis (Slide 6)
Different countries depends on different economies to see the cause of financial problems. For the past decades, known that the Asian Tiger or Asian Dragons economies has grown 5% to 10% having their economies opened to US financial markets in order to take up their exports and attract foreign investments to ease capital flows. Keeping the exchange rates tight with the US dollar or the...
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