1997 Asian Financial Crisis

Dated events

1. July 2, 1997 · Bank of Thailand floats the baht, abandoning its dollar peg
   Thailand's central bank ran out of foreign currency reserves and stopped defending the baht's fixed exchange rate, allowing it to fall sharply. Investors who had borrowed in dollars to invest in Thailand suddenly faced much larger debts, and banks across the region that had lent heavily to Thai borrowers faced huge losses. Within weeks, the crisis spread to neighboring countries as investors worried their currencies might be next.
2. Oct. 23, 1997 · Hong Kong stocks fall 10.4% as speculators attack the Hong Kong dollar peg
   Stock prices in Hong Kong fell more than 10 percent in a single day as traders feared the Hong Kong dollar's peg to the US dollar would break like Thailand's had. To defend the peg, Hong Kong's monetary authority let short-term interest rates shoot up to extreme levels, and the selling spread to stock markets around the world in the following days.
3. Nov. 21, 1997 · South Korea announces it will seek emergency IMF assistance
   South Korea's currency collapsed and the country ran short of dollars needed to pay foreign debts, forcing it to ask the International Monetary Fund for emergency loans. This signaled to the world that even a large, developed economy in Asia was in serious trouble, spreading fear that the crisis would reach every emerging market.
4. Jan. 6, 1998 · Indonesia's 1998/99 budget, seen as missing IMF targets, sets off rupiah plunge
   Indonesia's currency lost half its value in weeks as investors judged the government was not carrying out the reforms agreed with the IMF, and foreign investors fled. Banks and companies across Asia that owed money in dollars faced bankruptcy as their local currencies became nearly worthless.
5. Aug. 17, 1998 · Russia devalues the rouble and defaults on its domestic debt
   Russia stopped paying its debts and let the rouble fall sharply, shocking global investors who thought the crisis was contained to Asia. Money rushed out of every emerging market at once as investors everywhere feared their own countries might be next, forcing central banks worldwide to defend their currencies.

Assets named in this scenario · 5

Chinese Yuan (CNY)iShares MSCI Emerging Markets ETFJapanese Yen (JPY)SPDR S&P 500 ETF TrustVanguard FTSE Emerging Markets ETF

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