Definition: Asian financal crisis or Asian Contagion occurred between June 1997 and January 1998 in Eastern Asian countries as Indonesia, South Korea and Thailand. Then it affected all other Asian countries such as Hong Kong, Malaysia, Laos, the Philippines, China, Taiwan, Singapore, Brunei and Vietnam.
After the high growth rates (by 6% to 9% per annum) in South Korea, Thailand, Malaysia, Indonesia, Singapore and the Philippines (these called as “tiger economies”), their stock markets and currencies lost about 70% of their value. They and others suffered from loss of demand and confidence. Market declines were also felt in the United States, Europe and Russia as the Asian economies slumped.
Although most of the governments of Asia had seemingly sound fiscal policies, the International Monetary Fund (IMF) stepped in to initiate a $40 billion program to stabilize the currencies of South Korea, Thailand, and Indonesia, economies particularly hard hit by the crisis.