“The Asian financial crisis was a major economic crisis that affected many countries in Asia, beginning in July 1997. The crisis was characterized by sharp declines in the value of the currencies of several Asian countries, as well as a drop in stock prices and other financial assets. The crisis was triggered by a number of factors, including high levels of foreign investment, a lack of financial regulation, and overvalued currencies.
The crisis began in Thailand, where the government was forced to float the baht after it was unable to defend its fixed exchange rate. This led to a sharp devaluation of the currency and sparked a panic among foreign investors, who began to withdraw their money from the country. Similar crises soon spread to other countries in the region, including Indonesia, South Korea, Malaysia, and the Philippines.
The crisis had a profound impact on the economies of the affected countries, leading to widespread unemployment, bankruptcies, and social unrest. It also had significant implications for the global economy, as many international banks and financial institutions had invested heavily in the affected countries and suffered substantial losses.
In response to the crisis, the International Monetary Fund (IMF) provided emergency loans to several affected countries in exchange for sweeping economic reforms, including the implementation of austerity measures and financial sector reforms. These reforms were controversial and led to social and political unrest in many of the affected countries.
The crisis eventually began to abate in the late 1990s and early 2000s, as the affected countries implemented reforms and the global economy began to recover. However, the crisis had a lasting impact on the affected countries, and many have since implemented measures to prevent similar crises from occurring in the future, including stricter financial regulation and greater government control over the financial sector.”
Sourced from Chat GPT, assessed by Sean Lee