Asian financial crisis

A regional economic crisis that began in Thailand in 1997 and spread across East and Southeast Asia, bringing currency collapses, financial turmoil, and recessions.

Thai baht: Thailand’s national currency, whose devaluation in July 1997 marked the crisis’s opening. Pressure on the baht forced Thailand to abandon its dollar peg and triggered regional contagion.
Thailand: A Southeast Asian country whose currency and financial crisis began the 1997 regional turmoil. Its baht devaluation and financial-sector troubles marked the crisis’s first major rupture.
International Monetary Fund: An international organization that provides financial assistance and policy advice to member countries. It organized rescue packages for Thailand, Indonesia, and South Korea, with conditions that remain disputed.
Reformasi (Indonesia): The Indonesian reform movement that ended Suharto’s authoritarian rule and pursued political change after 1998. Economic collapse and public unrest helped force Suharto’s resignation and open this transition.
Washington Consensus: A set of market-oriented policy prescriptions associated with economic reform and international financial institutions. Its liberalization and fiscal-policy assumptions shaped, and were contested in, the crisis response.
Currency peg: An exchange-rate arrangement that fixes a currency’s value to another currency or a basket. Pegged rates encouraged borrowing based on exchange-rate stability that governments could not sustain.
Indonesia: An archipelagic Southeast Asian country that suffered severe economic and political upheaval during the crisis. Rupiah collapse, corporate distress, and unrest made Indonesia the crisis’s most profound social case.
Michel Camdessus: A French economist who served as managing director of the International Monetary Fund from 1987 to 2000. He led the IMF during the crisis and became a prominent face of its intervention.
Asian monetary fund proposal: A proposal for a regional fund to support Asian economies facing financial crises. The crisis revived debate over whether regional institutions could provide alternatives to IMF-led rescues.
Capital account liberalization: The removal of restrictions on international movements of capital. Rapid liberalization without robust financial safeguards is central to explanations of vulnerability.

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