TradeAlmanac
Sign in

Asian financial crisis

The sequence of devaluations and collapses across South-East Asia that began when Thailand stopped defending its currency in 1997.

How to read the number

The vulnerability was a currency mismatch: companies borrowed in dollars and earned in local money. While the peg held the risk was invisible; once it went, the debt grew instantly.

When the metric lies

The crisis spread to economies built quite differently — investors left the region wholesale without discriminating, which is what contagion means in practice.

Also known as: asian crisis

Related terms