Asian Financial crisis 1997
Ten years ago, on July 2nd 1997, Thailand's central bank floated the baht after failing to protect the currency from speculative attack. The move triggered a financial and economic collapse that quickly spread to other economies in the region, causing GDP growth rates to contract precipitously, bankrupting companies that had overexposed themselves to foreign-currency risk, and ultimately necessitating costly and politically humiliating IMF-led bailouts in the worst-affected countries.Early May (1997) - Japan hints that it might raise interest rates to defend the yen. The threat never materializes, but it shifts the perceptions of global investors who begin to sell Southeast Asian currencies and sets off a tumble both in currencies and local stock markets.July 2 - After using $33 billion in foreign exchange, Thailand announces a managed float of the baht. The Philippines intervenes to defend its peso.July 18 - IMF approves an extension of credit to the Philippines of $1.1 billion.July 24 - Asian currencies fall dramatically. Malaysian Prime Minister Mahathir attacks "rogue speculators" and later points to financier George Soros.Aug. 13-14 - The Indonesian rupiah comes under severe pressure. Indonesia abolishes its system of managing its exchange rate through the use of a band.Aug. 20 - IMF announces $17.2 billion support package for Thailand with $3.9 billion from the IMF.Aug. 28 - Asian stock markets plunge. Manila is down 9.3%, Jakarta 4.5%.Sep. 4 - The peso, Malaysian ringgit, and rupiah continue to fall.Sep. 20 - Mahathir tells delegates to the IMF/World Bank annual conference in Hong Kong that currency trading is immoral and should be stopped.Sep. 21 - George Soros says, "Dr Mahathir is a menace to his own country."Oct. 8 - Rupiah hits a low; Indonesia says it will seek IMF assistance.Oct. 14 - Thailand announces a package to strengthen its financial sector.Oct. 20-23 - The Hong Kong dollar comes under speculative attack; Hong Kong aggressively defends its currency. The Hong Kong stock market drops, while Wall Street and other stock markets also take severe hits.Oct. 28+ - The value of the Korean won drops as investors sell Korean stocks.Nov. 5 - The IMF announces a stabilization package of about $40 billion for Indonesia. The United States pledges a standby credit of $3 billion.Nov. 3-24 - Japanese brokerage firm (Sanyo Securities), largest securities firm (Yamaichi Securities), and 10* largest bank (Hokkaido Takushoku) collapse.