The 1997 Asian Financial Crisis (AFC) Arthur James Haruto Noguchi Wayne Saward.

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Presentation transcript:

The 1997 Asian Financial Crisis (AFC) Arthur James Haruto Noguchi Wayne Saward

Background of the AFC When?  1997 Where?  Thailand, Malaysia, South Korea, Hong Kong, Indonesia

Primary Causes of AFC Swift Pull-out of Foreign Investments Underdeveloped Asian Financial Markets

Primary Consequences Devaluation of Asian Currencies Collapse of Asian Economies

Impact on Thailand 9% Economic Growth Devaluation of the Baht Baht Buy Back Fixed  Floating Interest Rates 75% Decline in Stock Market Company Bankruptcies Unemployment

Impact on Hong Kong Monetary Authority’s Effort Overnight Rate Increase (8%  23%) Weakened Impact of Financial Crisis

Impact on Malaysia Devaluation of the Ringgit Fixed  Floating Rate System Economic Depression in ALL Sectors

Impact on Indonesia Devaluation of the Rupiah after Thailand IMF to the Rescue Severe Inflation Suharto Losing Power

Proposition: AFC caused by INTERNAL Factors. Asian Economic Growth Reliant Solely on Foreign Investments Weak Domestic Banking Systems Un-tradable Investments No Long Term Plan for Economic Growth

Proposition: AFC caused by INTERNATIONAL Factors Unreliable Risk Analysis IMF and World Bank –Regulation & Restrictions

Proposition: Globalization should be reduced to prevent future crisis Globalization is Necessary for Expansion International Cooperation IMF

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