Thai Baht Collapse Ignites Systemic Southeast Asian Economic Crisis
Thailand’s decision to float the baht on July 2, 1997, triggered a catastrophic financial crisis across Southeast Asia. The currency collapsed from 25 baht per USD to 54 baht per USD by January 1998, causing systemic economic destabilization. The IMF and World Bank responded with a $20 billion bailout package, imposing strict structural adjustment conditions that fundamentally reshaped regional economic policies.
Key impacts included:
- Rapid capital flight from Southeast Asian markets
- Deep recessions in Thailand, Malaysia, Indonesia, Philippines
- Significant increases in unemployment and poverty
- Fundamental reforms in financial regulation and economic policy
The crisis exposed critical vulnerabilities in emerging market economies, including poor financial supervision, unsustainable currency pegs, and over-reliance on foreign borrowing.
Key Actors
Sources (8)
- The Asian Financial Crisis: Origins and Implications
- Asian Financial Crisis: Origins and Global Impact
- Lessons from the Asian Financial Crisis
- IMF Asian Crisis Response
- Finance & Development - The Asian Crisis: Causes and Cures
- Lessons Learned from the Tom Yum Kung Crisis (2007)
- Recovery from the Asian Crisis and the Role of the IMF -- An IMF Issues Brief (2000-06-23) [Tier 1]
- The Asian Financial Crisis: Origins and Implications
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