The Asian financial crisis on the late 1990's

The Asian financial crisis started on the period between the years 1997-1999. The crisis had been started on July of 1997 as a result of it many Asian countries suffered its consequences during that time. The most affected countries that suffered from it are Thailand, Malaysia, Indonesia, Philippines and South Korea. The financial crisis on Thailand with the fall or collapse of the Thai Baht after the Thai government was required to float its currency and to cut the pegging to the dollar that is fixed with the Thai official currency, because of the Thai financial problem had a negative. Let’s look now at the conditions of some Asian countries got caught with Asian financial crisis which started with Thailand. Before exactly one before the crisis, it seems that the Indonesian economy was in a good condition. This country had low inflation and a trade surplus of $900 million and huge exchanges which about $20 billion. As a result of the Thailand float of its currency, the Indonesian monetary authorities decided to contract the rupiah currency trading band from 8% to 12%. On the long run, it had a negative effect, and made Moody’s to rate the Indonesian long term debt to junk bond. However, the situation is different in South Korea. The banking sector was held back with non-performing loans as large companies and corporations used these loans for funding aggressive expansions for their operations. As a result many Korean companies and businesses failed to make profits during that period. For example: KIA Motors the third largest car maker on South Korea had emergency loans in order to use to expand its operations. The company suffered too many losses during 1997-1998. Finally, Hyundai took over KIA, and Samsung motors venture failed and costs about 5 billion dollars, and Daewoo been sold to General Motors.