The Economy of Thailand

Crisis outbreak

The fixed exchange rate has given a fake sentiment of security in the southeastern Asian countries, (Thailand, South Korea, and Indonesia) this system has encouraged these countries to conclude a huge debt denominated by the U.S. Dollar, in additional to this the exports of these countries were weak in the mid-seventies because of , the high value of the U.S. Dollar against the Japanese yen, on the other hand China devalued its currency in 1994, the huge inward capital flows and the weakness of the exports had reflected on the widening of the deficits in current accounts as well as a significant portion of the inflows were in the form of a short-term loans, which leads these countries to an external distress.

As a result of the currency prices speculation and the declaration of the stock market profits, the monetary policies were disturbed in those markets which led to increase the interest to stop transferring the national currency to other foreign currency especially the U.S. Dollar; moreover, to try to encourage the investors who are biased to the U.S. Dollar to transfer the funds to the national currencies.

Based on that, the interest rate has increased to the extent of 25% in Thailand and 35% in Korea, and it has remained at this level for several days, which forced the investors of these markets to give up their securities and deposit its value in the banks to benefit from the increase in the interest rate. This resulted on the increase of the securities without any purchase offer offset, which led to sharp declining in the stock prices reached to 50-25% comparing to the prevailing market rates.

Thailand: Economy of Thailand

Between the years 1985 to 1996, Thailand's economy has developed and peaked to over...

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...ai Motors took over Kia Motors. Whereas; Samsung Motors' $5 billion venture was liquidated due to the crisis, and eventually Daewoo Motors was sold to the American company General Motors (GM).

The South Korean won, meanwhile, weakened to more than 1,700 per U.S. dollar from around 800. Regardless of the sharp economic drops and the frequent bankruptcies of the corporations, South Korea has managed to triple its per capita GDP in dollar terms since 1997. Indeed, it resumed its role as the world's fastest-growing economy—since 1960, per capita GDP has grown from $80 in ostensible terms to more than $21,000 as of 2007. However, like the chaebol, South Korea's government did not escape unscathed. Its national debt-to-GDP ratio more than doubled (approximately 13% to 30%) as a result of the crisis. In South Korea, the crisis is also commonly referred to as the IMF crisis.