Asian Financial Crisis

Asian Financial Crisis - Matthew Davidson MGMT 450 Extra...

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Matthew Davidson MGMT 450 Extra Credit Essay 03/26/08 Causes and Effects of the Asian Financial Crisis of 1997 The Asian Financial Crisis began in July of 1997, and is known as a period of time in which much of Asia was under extreme financial instability. The crisis began in Thailand, where the collapse of the Thai baht (form of currency) was the initial spark to the flame that became the Asian Financial Crisis. The Thai government finally had to resort to floating the baht, releasing its peg to the United States dollar, after numerous failed attempts to support it in the midst of overextending the nation’s finances, which had driven the country bankrupt even before the bahts collapse. This overextension in turn caused reduced earnings on imports due to the devaluation of the currency, which lead to most of Asia experiencing declining currencies, low stock markets, and a significant rise in private debt. Although nearly all of Southeast Asia experienced effects of the crisis, Indonesia, South Korea, and Thailand were hit the hardest, leaving mainland China, India, Taiwan, and Vietnam relatively unharmed. The IMF promptly
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This note was uploaded on 04/16/2008 for the course MGMT 450 taught by Professor Staff during the Spring '08 term at Texas A&M.

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Asian Financial Crisis - Matthew Davidson MGMT 450 Extra...

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