The so-called “Asian economic miracle” turned disastrous in July 1997
when investors did what they do so well: lost confidence, particularly in
currencies. High-yield rates made Asian markets appealing, but when the U.S.
tried to stem its own recession by lowering interest rates, it made itself more
attractive and, as a consequence, the Asian markets looked too risky.
A domino effect followed, beginning in Thailand and spreading through
the Philippines, Hong Kong, Indonesia, Malaysia, and beyond, triggering an
unprecedented global crisis. Asian markets that had enjoyed some rare
prosperity were slammed: Thailand dipped 75%, Hong Kong’s HSI went down 23% and
Singapore dropped 60%.
Not a single global market went untouched.
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