The Asian financial crisis occurred from July to October 1997, starting in Thailand, and then further affected the currencies, stock markets and other asset values ??of neighboring Asian countries. Another name for this crisis is the Asian Financial Crisis (common in Hong Kong). Indonesia, South Korea and Thailand are the countries most severely affected by the financial crisis. Laos, Malaysia, the Philippines and Hong Kong have also been affected. The People's Republic of China, Singapore and Taiwan were relatively lightly affected (China implemented macro-control before the financial crisis, which reduced losses), but Taiwan was also substantially harmed, so it will face challenges in the future. The threat of "local financial crisis". Japan is still in its own long-term economic difficulties after the collapse of the bubble economy, and has not been greatly affected by the financial crisis. In 1997, Thailand's economy was weak. Many Southeast Asian countries, such as Thailand, Malaysia and South Korea, relied on short- and medium-term foreign loans for a long time to maintain the balance of international payments. Their exchange rates were relatively high and most of them maintained fixed or linked exchange rates with the U.S. dollar or a basket of currencies. This gave the international community Speculative money provides a great hunting opportunity. The Quantum Fund, led by the well-known American speculator Soros, took advantage of the situation and entered Thailand. Starting with a large amount of short selling of the Thai baht, it forced Thailand to abandon its long-standing fixed exchange rate pegged to the US dollar and implement free floating, thus triggering an unprecedented crisis in the Thai financial market. . The crisis soon spread to all countries and regions in Southeast Asia that implemented free currency convertibility, and the Hong Kong dollar in Hong Kong became the most expensive currency in Asia. In August 1998, Quantum Fund and Tiger Fund began to speculate in Hong Kong dollars. They first borrowed a large amount of Hong Kong dollars from banks and sold them on the market, in exchange for borrowing U.S. dollars to earn interest, and at the same time short-selling Hong Kong stock futures. The former will cause interest rates to rise sharply, causing the stock market to fall, thereby making profits in the futures market; at the same time, once the Hong Kong dollar falls, they can also make profits in the foreign exchange market at the same time, killing two birds with one stone. The Hong Kong SAR government raised interest rates significantly, with overnight interest rates once as high as 300%, and used foreign exchange reserves of nearly HK$120 billion (approximately US$15 billion) to purchase a large number of Hong Kong stocks. As a result, speculators were forced to pay high prices on the futures settlement day on August 28. The positions were closed and the losses were severe. Coupled with the simultaneous setbacks in Russia and Malaysia, the speculators finally retreated. In this battle, the Hong Kong government used a large amount of foreign exchange reserves to invest in the stock market, once accounting for 7% of the market value of Hong Kong stocks, and even becoming a major shareholder of some companies. Once the stock market fell, the linked exchange rate may collapse. So in November 1999, the Hong Kong government listed the purchased Hong Kong stocks on Tray Fund and sold them back to the market in batches. This crisis forced all major currencies in Southeast Asia except the Hong Kong dollar to depreciate sharply in a short period of time. The collapse of the monetary systems and stock markets of Southeast Asian countries, as well as the resulting withdrawal of a large number of foreign capital and the huge pressure of domestic inflation, put a huge pressure on the economic development of this region. Cast a shadow.

Data GNP against USD (billions of US dollars) Jun 1997 Jul 97 Jun 1998 Thailand 24.5 Baht 41 170 102 Indonesia 2,380 IDR 14,150 205 34 Philippines 26.3 Peso 42 75 47 Malaysia 2.5 RM 4.1 90 55 South Korea 850 won 1,290 430 283