Case | HBS Case Collection | 2009 (Revised from original 2008 version)

Chronology of the Asian Financial Crisis

by Laura Alfaro, Rafael Di Tella and Renee Kim

Abstract

In July 1997, Thailand became the first Asian "tiger" economy to abandon its fixed exchange rate system in response to speculative attacks on its currency. Investors started to flee Asia, and the crisis rapidly spread to other countries. Central banks spent billions of dollars to try and defend their currencies, only to seek emergency bailouts from the International Monetary Fund. This case presents a chronology of events that unraveled during the Asian financial crisis from 1997 to the end of 1998.

Keywords: Financial Crisis; Currency Exchange Rate; Central Banking; Policy; Crisis Management; Asia; Thailand;

Format: Print

15 pages

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Citation:

Alfaro, Laura, Rafael Di Tella, and Renee Kim. "Chronology of the Asian Financial Crisis." Harvard Business School Case 708-001, April 2009. (Revised from original February 2008 version.)

Over the past decade, Brazil's future as a leading world economic power appeared certain. An expanding middle class and commodity boom had fueled economic growth, with GDP growth hitting a peak of 7.5% in 2010. However, the high cost of conducting business in Brazil, known as "Custo Brasil," was hurting domestic manufacturing, while incoming foreign investments threatened to overwhelm Brazilian markets. Under President Dilma Rousseff, economic growth stagnated, and the Rousseff administration struggled to find the best balance between reducing inflation, maintaining a flexible exchange rate, and improving the competitiveness of Brazilian exports.

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