Asian Currency Crisis

1. How did the Asiatic Currency Crisis Start? The dilemma in Asia was caused by a number of domino effect factors. However, the turmoil was sparked by Thailand in the year 1997. The Thai baht took a dramatic fall. As the Thai baht was falling, the government used it irrelevant reserves to defend the currency. Finally, the government had no choice whole to let the Thai baht float and receive pecuniary assistance from the IMF. 2. What were the major causes for the crisis? It is said that there could be numerous causes for this currency crisis. However, there ar a few that are common among financial experts. One cause was the unwise pass up investments. There was an abundant of inflows and Thailand could non handle the debt because it did not the inwrought reserves to defend its currency. An other(a) cause is the high very strong exchange rates which reduced the price of the competitiveness of exports. another(prenominal) cause for this crisis is the decline in inv estor self-reliance. Investors started to lose confidence in Thailand and thus stock prices began to fall in premature 1996. The abide cause for this crisis was that countries in Southeast Asia had their currency pegged to the US dollar. 3. wherefore did it spread to other countries?

The reason it spread to other countries was because other countries (Indonesia, Philippines, Malaysia, and Korea) were struggling with their current account deficits. Since Indonesia was the next agricultural to accept help after Thailand, it switched to a near be undirected rate system and began to receive aid from the IMF. Si nce Thailand and Indonesia needed to a goo! d deal help other countries began to struggle. 4. What damage did the Asian economies suffer as a consequence of the crisis? As a end of the crisis, Asian economies suffered. There were an abundance of corporate bankruptcies and as a result of these bankruptcies, there was an increase to the unemployment rate. Also, stock and real estate markets suffered not bad(p) losses. 5. How did it affect international trade...If you want to get a skilful essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay