Introduction:
At the end of the 1980s and early 1990s, the economies of Southeast Asia developed rapidly. Thailand, Malaysia, Indonesia, Singapore and Korea experienced an average annual GDP growth of 12%, which was called “the Asian miracle”. Among them, Thailand experienced approximately 15% GDP growth, and Malaysia experienced almost 20% GDP growth. But this momentum of economic growth did not last long. This rapid development not only brought huge economic profits, but also exposed the weaknesses and problems which overheated their economic development. These problems did not get much attention and got worse. In this case, the financial crisis broke out in 1997. This crisis was first seen in the currency depreciation and stock market. Starting in Thailand, the Thai baht devalued swiftly and lost more than half of its value and the Thai stock market also dropped 75%. As a consequence, many banks and companies had to declare bankruptcy. Due to the economic globalization, following Thailand, almost all of the Asian countries were plunged into severe economic difficulties. The crisis forced most Asian currencies to depreciate precipitously in a short period, and their currencies’ exchange rate against the dollar dropped between 10% to 70%. The change in foreign exchange market also affected the Asian stock market, and caused stock prices to slump by more than 30%. Besides, combined with the severe inflation and withdrawals from foreign investors, the speed of the Asian overall economic growth slowed down. The speed of economic growth in Thailand, Indonesia, Malaysia and Philippine declined to 3% after 1997, and for Korea, there was a negative economic growth. In this crisis, Thailand is one of the most typical countries that gave up its fixed exchange rate regime and lost heavily. But there was also a country, Hong Kong, who stuck to its fixed exchange rate regime and succeeded in
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