The Asian financial crisis

Date

Began 2 July 1997

Category

Economy & trade

Region

East and Southeast Asia

Era

Contemporary

Significance

On 2 July 1997 Thailand, depleted of the foreign reserves needed to defend its currency peg, was forced to float the baht, triggering a regional financial crisis that spread rapidly across East and Southeast Asia.

The baht lost more than half its value, and contagion swept through Indonesia, South Korea, Malaysia and the Philippines as currencies and stock markets collapsed, capital fled, and heavily indebted firms and banks failed. The International Monetary Fund assembled rescue packages worth tens of billions of dollars for Thailand, Indonesia and South Korea in exchange for austerity and structural reforms, terms that proved deeply controversial and, critics argued, deepened recessions. The crisis ended the era's 'Asian miracle' growth narratives, caused widespread unemployment and hardship, and helped topple Indonesia's long-ruling President Suharto in 1998 amid mass protests. Its effects rippled to Russia, whose 1998 debt default it helped precipitate, and to Latin America. The episode reshaped debates over global financial architecture, capital-flow regulation and the role of the IMF, and prompted many emerging economies to accumulate large foreign-currency reserves as insurance against future shocks.

Empires active in Began 2 July 1997

• British Empire
  1583 CE – 1997 CE
• Portuguese Empire
  1415 CE – 1999 CE

Related economy & trade events

• The global financial crisis and the collapse of Lehman Brothers
  15 September 2008
• China's Reform and Opening-Up Begins Under Deng Xiaoping
  December 18, 1978
• Amazon launches, pioneering large-scale e-commerce
  16 July 1995
• Founding of the World Trade Organization
  1 January 1995
• Launch of the euro
  1 January 1999 (notes & coins 2002)
• The dot-com bubble bursts
  March 2000

Further reading

The Silk Roads: A New History of the World

The wider story

The Silk Roads: A New History of the World

Peter Frankopan

Best-selling world history told through the trade routes that moved goods, faiths and ideas.

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