asian crisis 1997 also known as south east asian crisis. begining from thiland..

1. ASIAN CRISIS-1997

2. GROUP MEMBER (Group 3)
Roshan Rupakheti (1304)
Jigyasa Pant (1319)
Tilak Prasad Dhital (1313)
Sagar Jamarkattel (1310)
Prashant Bhattarai (1333)

3. Table Of Content
Introduction of Asian Crisis
Cause of Asian Crisis
Effect Of Asian Crisis
IMF Role in Crisis
Lesson and Conclusion

4. Introduction Of Financial Crisis
 The Asian Financial Crisis is a crisis caused by
the collapse of the currency exchange rate
and hot money bubble.
 It started in Thailand in July 1997 and swept
over East and Southeast Asia.
 The financial crisis heavily damaged currency
values, Stock markets, and other asset prices
in many East and Southeast Asian countries.

5. Pre Crisis Scenarios
 Rapid expansion of economy since 1990 in Thailand through borrowed capital(foreign debt)
 Excessive investment led to creation of ‘Bubble’ in the economy
 Finally on July 2, 1997, Thai Central bank moved from fixed rate regime to floating rate
regime.
 Capital Outflows increased as rates in USA started increasing.
 Due to these factors, once the currency was pegged to market rates (floating rate regime)
Thai Baht declined 38% from THB25/$ to THB40/$ in 4 months till November 2007
 Thailand was under tremendous speculative pressure – same speculation started to spread
to neighbouring countries.
 Government already used precious hard currency reserves to support economy and raised
interest rates beyond sustainable levels.
 Once overly valued Thailand Baht declined, all countries followed suit, partly due to
structural weakness and partly due to speculation .

6. Cause Of Asian Crisis
Area affected:- Thailand, Korea,
Indonesia, Malaysia, Philippines,
Taiwan, Singapore

7. Cause Of Asian Crisis
Under developed financial system
Shortage of foreign exchange
Role, and operation of international monetary fund
Unstable political situation
Ineffective action of government
Lack of control and sufficient regulations in capital market

8. Effects of Asian Crisis - 1997
 Drop down of GDP
Political Repercussions
Effect in Developing Countries
Fall in Oil Prices

9. IMF Role in Asian Crisis - 1997
The IMF plays its role in stabilizing the international financial system through crisis prevention and
crisis mitigation. The major effects are: -
IMF surveillance :- Surveillance is a catch-all term encompassing the process through which the
IMF oversees the international monetary system and global economic developments and monitors
the economic and financial policies of its member countries.
Technical assistance:- Technical assistance is a form of non-financial assistance provided by the IMF
as a way of sharing its expertise with member countries.
Information Provision: The IMF needs to have access to information that is as complete and
accurate as possible in order to carry out its responsibilities-which include surveillance and the
provision of financing to its member countries.

10. What I learned From Asian Crisis?
-Foreign programs might not be suitable in different soil
-- too much of spending and attraction of investment might cause burden to the nation
-China was one of few countries that remained largely unscathed during the Asian Financial
Crisis.
-- There is often a craze or exuberance in the run-up to a crisis
-- Crisis can not define the future
-- recovery starts immediately after the crisis
-- International community intervention if asked as help

11. References
https://corporatefinanceinstitute.com/resources/knowledge/finance/asian-financial-
crisis/?fbclid=IwAR1Waf7IBwbOYvD8pAzZx7gaVwFwtEgZJXP_roRAPVMSAMeAudHNXRqrixs
https://www.economicshelp.org/blog/glossary/financial-crisis-asia-1997/?fbclid=IwAR04aF-
mBtkCsNnWoqdUWpxcPEW5ROtv9tel5laMaXO7YrstWHEs-agF-
yQ#:~:text=Impact%20of%20Asian%20Financial%20Crisis&text=Hit%20by%20the%20loss%20of,
and%20imported%20raw%20materials%20rose
https://www.youtube.com/watch?v=-5baey9Ey9g
https://www.youtube.com/watch?v=rI3wPtNQDIQ

12. ANY QUESTIONS ?