This post today is another study on the financial crisis from before.

Remember on 19 October 1987… The Black Monday strikes? Let’s fast forward to 10 year later, in the summer of 1997. In the beginning of July 1997, the East Asia is battling with a rising fear of worldwide economic meltdown. This Asian Financial Crisis is a series of currency devaluations. This had it turn caused the stock market to collapsed.

The Asian Miracle is a name used to describe the economic growth of East Asia. For 30 years, the growth rate of Thailand, South Korea, Hong Kong, Singapore, Taiwan and Indonesia had maintained a very high growth rate of 8-12%. This is attained by high interest rates which is used to attract foreign investments. The foreign investment also allows rapid industrialization.

The high exposure to foreign investments also brings them a bigger risk to forex movements. As the US economy recovered