Asian Crisis In July 1997, the turbulence in the Asian currency markets began. It was the start of the Asian crisis. The Asian crisis began in Thailand and quickly spread throughout the main Asian economies. The Asian crisis eventually reached economies as far away as Russia and Brazil.

The result of the Asian crisis was that foreign lenders withdrew their funds amid fears of a global financial meltdown. As a result of the Asian crisis, the USA dollar strengthened.

The Asian crisis affected Indonesia, South Korea, and Thailand the most. Hong Kong, Malaysia, Laos, and the Philippines were also hurt by the crisis.

The People's Republic of China, Taiwan, India, Singapore, Brunei, and Vietnam were not affected as much, however all of them suffered from a loss of demand and confidence throughout the region.

The Asian financial crisis led to sharp declines in the currencies, stock markets, and other asset prices of a number of Asian countries.

Asian Crisis

The US dollar also strengthened as a result of the Asian Crisis because many EU countries were struggling to cut their budget deficits to meet the Maastricht Treaty criteria for euro membership.


The International Monetary Fund (IMF) played a major role in healing the Asian crisis by approving about 35 billion USD of IMF financial support for reform programs in Indonesia, Korea, and Thailand. IMF also mobilized some 77 billion USD of additional financing from multilateral and bilateral sources in support of the reform programs to heal the Asian crisis.

The Asian crisis resulted in political implications as well, especially in Indonesia. After 30 years in power, Indonesian President Suharto was forced to step down in May 1998 in the wake of widespread rioting that followed sharp price increases caused by a drastic devaluation of the Indonesian rupiah.