Is the Asian Flu Fatal?
For most of the 1990s, East Asian economies were king, sucking up foreign capital and rewarding investors with handsome returns. Times change, The first signs of trouble came in spring 1997, when currency traders attacked the Thai baht. After belatedly attempting to reform its financial policies fixed exchange rate in June 1997, prompting the baht to plunge 20 percent. Other countries quickly followed, By November 1997, the International Monetary Fund had announced bailout packages for Thailand, Indonesia, and South Korea. Even the soundest and largest Asian economies were hit hard. Hong Kong, while repelling an attack on its currency, saw its stock market decline 40 percent in October. Japan» which had been deep in deflationary doldrums for the entire decade, saw its fourth-largest trading firm collapse under a pile of bad debt.