The Currency Crisis In Thailand And Its Effects



This paper discusses the impact of the currency crisis. On July 2, 1997 Thailand devalued its currency against the dollar, leading to a currency crisis that has led to devaluation's in Indonesia, Malaysia, South Korea, Russia, and Brazil. In our overview, we will discuss the timing of the crisis, the alleged causes, the actions taken by the international monetary fund, the price of the U.S. dollar in terms of the countries currency and the effects of the crisis on each country.
Thailand
Thailand was the first economy to fall in July of 1997, creating a domino effect throughout Asia and beyond. Against the US dollar, Thailand was forced to abandon fixed exchange rates for the baht. This ...

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at ABN Amro Asia Securities states, "It's quite realistic to assume that non-performing loans will hit 50 percent. Ultimately there will have to be a bailout." 1 The banks are looking at the government to bail them out but as of December 30, 1998 no banks had requested government aid. At the beginning of the crisis in July, the baht was at B25.90/US$ and is currently at B36.90/US$ signifying a decrease of 29.81%.

Malaysia

In July of 1997, the Malaysian ringgit was at MR2.5200/US$. Currently the ringgit is at 3.7999US$, showing a 33.68 decrease. After a healthy decade of more than 8% growth annually, Malaysia is bracing for a wave of bankruptcies, rising inflation and unemployment rates. More than 2600 Malaysians lost their jobs every week, according to the latest Human Resources Ministry report. Even some of the Malaysia's most successful corporations have scurried to court seeking protection against creditors. As a result, troubled banks have become wary of dishing out ...

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PAPER DETAILS
Added: 2/25/2006 08:16:57 AM
Category: Economics
Type: Premium Paper
Words: 991
Pages: 4

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