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Transcript
Illustrative Case: The Asian Crisis of 1997 ⢠The roots of the Asian currency crisis extended from a fundamental change in the economics of the region: the transition of many Asian nations from being net exporters to net importers due to the following two reasons â Rapidly economic expansion â Many Asian countries pegged its currency at a fixed exchange rate with the US$, so their currencies appreciated with the US$ being strong after 1995 ⢠The deficit of BOP generates the depreciation pressure â To support their pegged exchange rates, Asian nations require to attract net capital inflow â The most visible roots of the crisis were the excess capital inflows into Thailand in 1996 and early 1997 10-24
