Revisiting the Asian crisis

Countries succumbed to pressure from IMF to liberalise their current account after growing rapidly

The balance of payments crisis in Asia began this month two decades ago in Thailand, and then rapidly spread to Indonesia and South Korea, by then a member of the Organisation for Economic Co-operation and Development (OECD), the advanced countries’ club, and later to Malaysia.

To recount the history of the crisis briefly, it began in July 1997 when the Bank of Thailand was forced to give up its pegged exchange rate with the dollar, after exhausting its reserves in defending the parity. (Many foreign speculators and banks had been shorting the baht for some time, including one bank simultaneously advising