The Specter Of The 1997 Crisis Haunts Asia

18 years after the financial crisis caused a series of governments to fail and companies to go bankrupt, the currencies of countries in the region are once again under pressure to depreciate.

Malaysia and Indonesia are two countries affected particularly seriously.

As if adding fuel to the fire, last week, Beijing continuously lowered the value of the yuan.

A vendor is counting money at a market in Malaysia.

However, investors are not completely panicked yet.

However, they believe that there are many other issues that are more worrying than currency.

Besides, the growth engine of many emerging countries is commodities.

Many experts also predict that the US Federal Reserve (FED) will raise interest rates in September. This will be the first time in nearly a decade that this agency has increased interest rates.

In early August, Sofyan Djalil – Indonesia’s Coordinating Minister of the Economy said on Reuters that he wanted the FED to act quickly.

However, CNN believes that just like in the crisis 18 years ago, Indonesian and Malaysian officials can still control their response under current pressure.

But this won’t be easy.

The East Asian financial crisis officially began in July 1997 with the collapse of the Thai baht due to massive capital flows leaving the country.

The financial crisis quickly turned into a severe economic recession.

The IMF had to launch a $36 billion rescue program at the end of 1997 to stabilize the currencies of the countries most affected by the crisis.