This piece was originally featured in the Australian Financial Review on July 02, Twenty years ago, on July 2, , the Thai baht broke its peg with the U. Growth plunged from positive 7 percent in the years leading up to the crisis to negative 7 percent, with Indonesian gross domestic product declining 13 percent. This had profound economic and political implications for the region, and indeed, the global economy. The countries involved in the crisis have responded by improving their economic frameworks.
Asian Financial Crisis: Lessons Learned and Unlearned
Financial crisis in Thailand caused by speculative attack (video) | Khan Academy
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.
What caused the Asian currency and financial crisis?
Global Reporting Network Publications. With Asia's financial crisis rumbling on, it has become evident that China, not the United States or Japan, holds the high cards as Asian nations try to rebuild their once-vibrant economies. Whether to maintain the value of China's currency and thus support recovery, or to devalue and undercut Asian neighbors.
It resulted in the Russian government and the Russian Central Bank devaluing the ruble and defaulting on its debt. The crisis had severe impacts on the economies of many neighboring countries. Meanwhile, James Cook , the senior vice president of The U. Russia Investment Fund , suggested the crisis had the positive effect of teaching Russian banks to diversify their assets.