The 1997 Asian financial crisis originated in Thailand, spreading to other countries. Recovery in 1998–1999 was rapid, with fears of a global meltdown subsiding. The crisis led to currency devaluation, stock market collapses, and high levels of foreign debt in affected countries. Efforts by the IMF and individual countries helped stabilize the situation, but Indonesia faced domestic turmoil resulting in President Suharto stepping down. By 1999, signs of economic recovery were visible in East and Southeast Asia.
A severe financial crisis that affected many Asian countries, leading to currency devaluations, stock market crashes, and overall economic downturn. It started in Thailand and quickly spread to other nations in the region.
On May 14, 1997, Thailand, with the intervention of Singapore, spends billions of dollars of its foreign reserves to defend the Thai baht against speculative attacks. This action demonstrates the efforts made to stabilize the Thai baht amidst the Asian Financial Crisis.
Thailand implements capital controls to segment the onshore and offshore markets in response to selling pressure and massive intervention in the forward markets.
The Bank of Thailand suspends the operations of 16 troubled finance companies and instructs them to submit merger or consolidation plans.
The Thai baht is floated, leading to a 15% devaluation in onshore markets and a 20% devaluation in offshore markets. This triggers pressure on the Philippine peso, Malaysian ringgit, and Indonesian rupiah.
On July 8, 1997, Malaysia's central bank intervenes to defend its currency, the ringgit, amidst the Asian Financial Crisis. This intervention reflects the efforts to stabilize the Malaysian currency during the crisis.
On July 11, 1997, the Philippine peso is devalued, reflecting the impact of the Asian Financial Crisis on the currency's value. This devaluation is part of the economic upheaval experienced in Southeast Asia during the crisis.
Bank Negara Malaysia (BNM) is reported to abandon the defence of the ringgit, indicating a significant development in the currency crisis.
On July 18, 1997, the IMF announces that it will make more than a billion dollars available to the Philippines to help relieve pressure on the peso, marking the first use of its 'emergency funding mechanism' during the Asian Financial Crisis.
On July 24, 1997, the Singapore dollar starts a gradual decline, reflecting the economic impact of the Asian Financial Crisis on Singapore's currency.
The Thai government formally requests financial assistance from the International Monetary Fund (IMF) to address the escalating economic turmoil.
Thailand takes the step of suspending a further 42 troubled finance companies, reflecting the deepening crisis in the financial sector.
Indonesia abandons the rupiah trading band, leading to a 4% depreciation of the currency and exacerbating the regional financial instability.
Thailand and the IMF reach an agreement on a US$17 billion financial stabilisation package, marking a crucial step in addressing the economic crisis.
Malaysia imposes trading restrictions on the stock market, including an effective ban on short selling, as part of efforts to stabilize the financial markets.
Bank Indonesia (BI) introduces selective credit controls on rupiah trading in an attempt to manage the currency's volatility and restore stability.
Indonesia asks for assistance from the IMF and World Bank after the rupiah falls more than 30% in two months, despite interventions by the country's central bank to support the currency. This marks the beginning of Indonesia's struggle during the Asian Financial Crisis.
Malaysia announces an austerity budget in response to the ongoing financial turmoil, signaling a significant shift in economic policy to address the crisis.
The Hang Seng index falls by 23% in 4 days, and overnight interest rates rise from 7% to around 250%. S&P downgrades Korea and Thailand's sovereign ratings, leading to a ripple effect across the globe.
Hong Kong's stock index plunges 10.4% after raising bank lending rates to 300% to fend off speculative attacks on the Hong Kong dollar. This event contributes to the escalating impact of the Asian Financial Crisis on the global economy.
Rattled by Asia's currency crisis, the Dow Jones Industrial Average experiences its biggest point loss ever, plummeting 554 points. This event reflects the contagious nature of the Asian Financial Crisis on global financial markets.
Russian equity prices decline by 23% in response to the ongoing financial crisis in Asia.
The IMF agrees to a loan package for Indonesia, eventually reaching $40 billion, in exchange for the closure of financially insolvent banks and other wide-ranging reforms. This marks a significant intervention by the IMF during the Asian Financial Crisis.
The Asian Financial Crisis started in November 1997, leading to the collapse of currencies and stock markets in several Asian countries.
Sanyo Securities Co. Ltd., one of Japan's top 10 brokerage firms, goes bankrupt with liabilities of more than $3 billion, becoming the first Japanese securities house to go bust since World War II. This event adds to the financial turmoil during the Asian Financial Crisis.
IMF approves a standby credit for Indonesia of US$10.1 billion, with US$3 billion made available immediately to address the financial crisis.
In Thailand, opposition leader Chuan Leekpai takes over as Prime Minister. In Russia, interest rates are raised by 7 percentage points, and authorities announce the widening of the intervention band for the rouble from +/− 5% to +/− 15%.
Korea abandons the defence of the won, signaling a significant development in the Asian financial crisis.
Korean finance minister resigns, and authorities announce a reform package in response to the financial crisis.
The daily fluctuation band for the Korean won is widened from ± 2¼% to ±10% in an effort to address the financial crisis.
Korea officially requests IMF assistance in response to the escalating financial crisis.
South Korean nationalists express strong disapproval of the IMF loan request, viewing it as humiliating for the country. President Kim Young Sam publicly apologizes on television for South Korea's economic malaise.
President Clinton describes the Southeast Asian economies as temporarily experiencing a 'few glitches in the road' during the Asia-Pacific Economic Cooperation (APEC) summit in Vancouver.
The IMF approves a historic $57 billion bailout package to South Korea, in response to President Bill Clinton's call for 'tough medicine' for the country's economic situation.
Thai authorities close 56 of the suspended finance companies in response to the ongoing financial crisis.
The IMF restarts its loan disbursement to Russia, releasing $700 million delayed in October. The IMF urges Russia to boost revenues and cut spending as part of the accord.
The Korean won was allowed to float freely against other currencies, leading to significant changes in the country's economy.
Kim Dae Jung becomes South Korea's first president elected from the opposition party. Shortly after, the South Korean won hits new lows, reflecting the economic challenges.
Rating agencies downgraded Korea's sovereign rating to speculative grade, causing a sharp decline in the value of the won.
Seoul secures an early payment of $10 billion in loans from the IMF and Group of Seven (G-7) to prevent a default on its short-term loan debts. In exchange, South Korea agrees to expedite financial reforms and open its domestic financial markets.
Foreign banks agreed to roll over Korean debt, providing much-needed financial stability to the country.
The Indonesian budget introduced on this day was poorly received by financial markets, contributing to the ongoing financial crisis.
In a speech given in Helsinki, Finland, chief economist of the World Bank, Joseph Stiglitz, breaks with orthodoxy and questions the assumptions and effects of the 'Washington Consensus.'
International creditors agree to a 90-day rollover of South Korea's short-term debt. The Indonesian rupiah nose-dives to an all-time low after Indonesian President Suharto unveils his state budget plan, leading to further economic instability.
Pressured by the IMF to take strong measures against Indonesia's ongoing economic decline, Suharto postpones 15 major government-subsidized projects, some linked to members of the Suharto family, to help cut expenditures and foreign debt.
Asia's largest private investment bank, the Hong Kong-based Peregrine Investments, files for liquidation due to being badly exposed from its loan investments in Indonesia, highlighting the widespread impact of the financial crisis.
Students in Jakarta rally to protest against the IMF-imposed policies, reflecting the social unrest and dissatisfaction with the measures taken to address the economic crisis.
South Korean labor unions agree to discuss layoffs with businesses and government leaders as a key condition insisted upon by the IMF in exchange for the fund's aid package, sparking debates over the social impact of the IMF's demands.
Suharto signs a new loan deal with the IMF agreeing to eliminate the country's monopolies and state subsidies. This leads to a significant increase in prices for basic food staples by as much as 80% in Indonesia. The signing follows a week of the rupiah's free-fall, prompting waves of panic buying.
International lenders officially agreed to roll over Korean short-term bank debt, easing the financial burden on Korean financial institutions.
Thailand's decision to allow full foreign ownership of securities firms contributed to the stabilization of the financial sector in the country.
Indonesia's currency plunges to a new all-time low of 12,000 rupiah against the dollar amid anxiety over Suharto's apparent choice for vice president, Technology Minister Bacharuddin Jusuf Habibie. Officials from South Korea also meet with international bankers in New York in an effort to restructure the country's short-term debt.
Indonesia guaranteed commercial bank obligations, allowed overseas investments in local banks, and announced a freeze on debt payments, aiming to restore confidence in the banking system.
International banks and South Korea agree on a plan to exchange $24 billion of short-term debt for longer-term loans, aiming to address the financial crisis. This marks a significant step in the efforts to stabilize the economy.
Agreement between Korea and its external creditors to exchange US$24 billion of short-term debt for government-guaranteed loans at 2¼ – 2¾ percentage points over 6-month LIBOR, providing much-needed financial relief.
Thailand reunifies the spot market by lifting currency restrictions, marking a significant step in its economic policy.
South Korean unions, government, and businesses reach a landmark agreement to legalize layoffs, which is ratified by Seoul's National Assembly. This agreement is a crucial step in addressing the economic challenges faced by South Korea during the financial crisis.
The IMF and several creditor governments oppose Indonesia's plan to create a currency board, threatening to withdraw financial assistance, leading to a significant economic and political standoff.
Camdessus announces that he will extend the IMF's loan program to Russia by one year and relax the stringent tax-revenue targets used as a criteria for awarding loans. This decision reflects the IMF's efforts to support Russia during its economic difficulties.
In a second review of Thailand's economic program, the IMF relaxes certain macroeconomic policy targets and approves disbursement of the second tranche, indicating a shift in the economic policies of Thailand.
The IMF announces that it is delaying a $3 billion installment of its $40 billion loan package to Indonesia, citing Suharto's unwillingness to implement his side of the deal. This prompts a charge from Suharto that the IMF reforms are 'unconstitutional.' This event signifies the challenges and tensions in the implementation of IMF reforms during the Asian Financial Crisis.
Suharto is sworn in for a seventh five-year term as president of Indonesia, amidst the backdrop of the ongoing financial crisis. This event marks a significant political development during the turbulent times of the Asian Financial Crisis.
Russian President Boris Yeltsin abruptly dismisses his entire cabinet, including Prime Minister Viktor Chernomyrdin, and appoints Energy Minister Sergei Kirienko as acting premier.
The US announces $70 million in food and medical emergency aid to Indonesia, despite the IMF suspending its loan package, in an effort to quell increasing food riots.
Indonesia and the IMF reach a third pact in six months for a bailout, with concessions made by both sides, marking a turning point in the Asian Financial Crisis.
Indonesia signs a new letter of intent on an economic program with the IMF, signaling a commitment to implement economic reforms and policies recommended by the IMF.
The IMF resumes a stalled lending program to Indonesia, approving a payment of $1 billion, signaling a positive development in the efforts to stabilize the Indonesian economy.
Students in Indonesia hold demonstrations across the country, protesting steep fuel and energy price hikes, and demanding extensive political reforms, contributing to the political turmoil during the Asian Financial Crisis.
In Indonesia, troops fire into a peaceful protest at a Jakarta university, killing six students and sparking a week of riots, leading to further escalation of the political crisis.
Suharto attempts to assuage student demonstrators by promising early elections, but the students reject his proposals, leading to increased pressure for his resignation.
Suharto resigns after 32 years in power, marking a significant turning point in Indonesian politics and the Asian Financial Crisis.
The IMF indefinitely postpones aid disbursement to Indonesia of $1 billion, scheduled for June 4, as the political situation in Indonesia remains unstable, reflecting the impact of the political transition on international financial support.
The Korean stock market experiences a significant decline, falling to an 11-year low, reflecting the deep impact of the financial crisis on the country's economy.
Russia's financial system is stretched to the breaking point as panic-stricken stock and bond markets continue to plunge, forcing the central bank to triple interest rates to 150% to avert a collapse of the ruble.
Russia's stock market crashes and Moscow's cash reserves dwindle to $14 billion amid unsuccessful attempts to prop up the ruble and pay off burgeoning debts. President Clinton pledges support for Yeltsin.
Indonesian authorities reach an agreement to restructure the external debt of Indonesia's banking and corporate sectors, signaling a significant step towards stabilizing the country's financial system.
The third quarterly review of Thailand's assistance program indicates that the restructuring is on track, reflecting progress in implementing the economic reform measures recommended by international organizations.
Japan announces that its economy is in a recession for the first time in 23 years.
The yen's fall to levels near 144 to the dollar rattles Wall Street, prompting the US Treasury and Federal Reserve to intervene to prop up the yen. Japan and the US spend some $6 billion to buy yen in order to strengthen it. Clinton calls on Tokyo to quickly resolve its banking problems and stimulate the economy.
Russian Prime Minister Sergei Kirienko submits a budget austerity plan to the IMF, which releases a previously held loan installment of $670 million.
Indonesia and the IMF announce a fourth agreement to rescue an economy quickly sinking into chaos. The IMF agrees to restore subsidies for food and fuel and provide another $4 billion to $6 billion for basic necessities.
Russia's lower house of parliament, the Duma, postpones action on spending and tax reforms needed to close the budget deficit and qualify for IMF loans.
The World Bank approves a US$1 billion loan to Indonesia as part of a larger pledge, providing crucial financial support to the country during the financial crisis.
The government's failure to raise cash by selling government shares of a state-owned oil company leads to a significant downturn in Moscow's markets, indicating the financial instability in Russia.
S&P affirms its rating on the Republic of Indonesia's US$400 million Yankee bond, but the outlook is described as negative, reflecting the ongoing economic challenges faced by Indonesia.
The Malaysian stock index hits a 9-year low, reflecting the economic downturn and financial instability in the region during the Asian Financial Crisis.
The IMF's announcement of a $23 billion emergency loan package for Russia, along with the international lender's use of an emergency line of credit, leads to a significant surge in Russian stocks and bonds, indicating the impact of international financial support on the Russian economy.
The International Monetary Fund (IMF) approves a US$1 billion payment to Indonesia and promises another US$6 billion, indicating international efforts to stabilize the Indonesian economy during the Asian Financial Crisis.
Yeltsin's veto of tax cuts approved by parliament and the imposition of new taxes, including a 3% tax on imports and quadrupling land taxes, demonstrate the government's measures to address the budget deficit and secure IMF loans, amidst the financial turmoil.
The IMF's final approval of a $22.6 billion loan package to Russia, despite the Duma's failure to enact some mandated austerity measures, highlights the complexities and challenges in providing financial assistance during the Russian financial crisis.
Moody's cuts Malaysia's foreign currency debt rating to ‘Baa2’ from ‘A2’ due to the country's recession, growing debt, and lack of clear policy direction in response to the Asian Financial Crisis.
The IMF's decision to ease conditions on its $57 billion aid package to South Korea, in response to rising unemployment and overburdened welfare programs, reflects the broader impact of the Asian Financial Crisis on the region's economies.
The significant plunge of the Dow by 300 points in response to the deepening crisis reflects the global financial repercussions of the Asian Financial Crisis, indicating the interconnectedness of the international markets.
Amid speculation about China's potential currency devaluation, Hong Kong's dollar and stock market face significant pressure, highlighting the regional impact of the Asian Financial Crisis and the interconnectedness of the Asian economies.
Malaysia's sovereign risk rating is cut to ‘BBB’ from ‘A’ by Thomson BankWatch, indicating increased financial risk and instability during the Asian Financial Crisis.
The Singapore stock index reaches a 9.5-year low, reflecting the economic challenges and financial downturn in the region during the Asian Financial Crisis.
The Russian market collapses and trading on the stock market is temporarily suspended, causing world markets to be rocked by fears of a financial meltdown in Asia and Russia. This event contributes to the deepening of the Asian Financial Crisis.
Russia's markets collapse on fears that Moscow will run out of money and default, intensifying the financial turmoil in the region. This event further exacerbates the Asian Financial Crisis.
The Hong Kong government intervenes in the stock market by purchasing an estimated HK$3 billion in stocks and futures, aiming to stabilize the market and prevent currency speculation during the Asian Financial Crisis.
Russia announces a devaluation of the ruble and a 90-day moratorium on foreign debt repayment, triggering panic in Moscow as Russians line up to buy dollars. This leads to Western leaders denouncing the Russian default and causing ripple effects in Latin American stock and bond markets.
Russia fails to pay its debt on GKO or treasury bills, officially falling into default. The IMF and Group of Seven (G-7) say they won't provide additional loans to Russia until it meets existing promises. This event marks a significant escalation of the Asian Financial Crisis.
Russia's economic crisis shakes world markets, bulldozing stocks and bonds in Latin America and reverberating through the US and Europe. Russia's Duma calls for Yeltsin's resignation, and investors pile into US Treasury bonds as a safe haven from the storm, causing yields to drop to record lows.
Yeltsin dismisses Kirienko and names Viktor Chernomyrdin as prime minister in response to the escalating economic crisis. This political move aims to address the challenges faced by Russia during the Asian Financial Crisis.
The IMF Executive Board approves an extended funding arrangement for Indonesia, demonstrating continued international support and efforts to stabilize the Indonesian economy during the Asian Financial Crisis.
After weeks of decline, Wall Street is overwhelmed by the turmoil in Russia and world markets, leading to the Dow Industrial average plunging 512 points, the second-worst point loss in the Dow's history.
Federal Reserve Chairman Alan Greenspan announces the readiness of the US to cut interest rates to prevent the crisis from affecting US growth, as Latin stocks and bonds plummet.
Russia's Duma rejects Prime Minister-designate Chernomyrdin, leading to the resignation of the central bank chairman and deepening the country's political and economic turmoil. Russian investors and lenders estimate their losses at $100 billion, while the Dow surges 381 points after Greenspan suggests that policy makers are considering an interest cut.
The Dow loses 249 points as Brazilian stocks fall 16%, adding to drops that have erased half the Brazil market's value. In Mexico, the Central Bank sells some $50 million in its first attempt to buoy the peso in three years, while Yeltsin nominates Yevgeny Primakov as prime minister.
The IMF announces that the debacle in Latin American markets is 'an overreaction to Russian events' and that it is ready to lend Latin American countries, using an emergency line of credit. Investors flee Brazil, drawing out more than $2 billion a day despite an interest rate rise to 50% by the Central Bank.
Tokyo's Nikkei index hits a 12-year low amid steep declines in Hong Kong, France, Britain and the US. The Dow drops 216 points, and Congress blocks Clinton's request for $18 billion in funding for the IMF.
A consortium of leading US financial institutions provides a $3.5 billion bailout to Long Term Capital Management, one of the largest US hedge funds, to prevent a collapse that could worsen the panic in the financial markets.
Stocks on Wall Street and in Europe suffer losses amid fears that the Long Term Capital debacle could put the entire banking system at risk, following the losses suffered by the world's largest banks.
The Fed cuts interest rates by a quarter point in an effort to stabilize the US and global economies amidst the ongoing financial crisis.
Worries that the Fed isn't doing enough to rescue the US and global economies cause a significant drop in the Dow, with investors flocking to US Treasury bonds for safety, leading to a historic drop in the yield on 30-year bonds.
Japan announces a $30 billion aid package for Southeast Asia to help the region recover from recession, while G-7 ministers create a rescue plan for Brazil.
The Fed cuts interest rates for a second time to prevent weak financial markets from tripping the US into a recession, resulting in a significant rally in the Dow and world markets.
Amid warnings of winter food shortages in Russia, Moscow creates an emergency food reserve and approves an emergency spending plan, including printing at least $1.2 billion, to address wage payments, rescue banks, and provide food to desperate regions.
Brazil's President Fernando Cardoso announces an austerity plan of $80 billion in tax increases and spending cuts over three years to secure an IMF assistance package, aiming to stabilize the country's economy.
The IMF refuses to disburse to Russia a $4.3 billion installment of the $22.6 aid package it agreed to in July, demanding a realistic budget for 1999, reflecting the severity of the economic crisis in Russia.
Russia strikes an agreement with foreign investors to accept repayment in rubles of $40 billion of debt frozen in August, but faces challenges in repaying $17.5 billion of debts due in 1999, indicating the ongoing financial turmoil in Russia.
The US agrees to provide 3.1 million tons of food to Russia to help offset Russia's worst grain harvest in 45 years and declining food imports due to the fall of the ruble, demonstrating the impact of the economic crisis on Russia's food security.
The IMF, World Bank, and leading industrial nations announce a $41.5 billion rescue package for Brazil, reflecting the global effort to stabilize Brazil's economy amidst the Asian Financial Crisis.
The Fed, citing 'unusual strains' in the credit markets, cuts interest rates for a third time in seven weeks, indicating the impact of the Asian Financial Crisis on the global financial system.
The World Bank projects that the crisis has cut world growth in half, to around 2%, and warns of a potential global recession in 1999 if Japan does not reverse the decline of its economy, highlighting the far-reaching impact of the Asian Financial Crisis.
The Brazilian congress rejects a key social security tax increase sought by the IMF, leading to a rout in Brazilian markets and stock sell-offs throughout Latin America and on Wall Street.
The Brazilian government allows its currency, the real, to float freely on world markets by lifting exchange controls, leading to a surge in markets in Latin America and around the globe as investors buy up Brazilian stocks at reduced prices.
Brazil's central bank raises interest rates in an effort to stabilize the market and to stem capital flight which has reached $200 million to $500 million a day.
Arminio Fraga, a former portfolio manager to billionaire George Soros, is named president of Brazil's Central Bank.
The IMF approves a $1 billion increase in its emergency loan package for Indonesia. The fund also approves the release of a $460 million installment that it had held back due to Indonesia's delay in closing down insolvent banks.
The Dow Jones Industrial Average closes above the 10,000 level for the first time in its history.
The Dow Jones Industrial tops 11,000.