1In March, 1997, Thailand was once again in chaos, but this time it was not an armed riot, but a run-on trend. On March 3, the Central Bank of Thailand announced that nine domestic finance companies and 1 1 housing loan companies had problems such as low asset quality and insufficient funds. On the 5th and 6th, 10 companies with problems were swept by investors to nearly $600 million. On March 7, the stock market plummeted. In May, the exchange rate of Thai baht against the US dollar fell to the lowest point in 10 years, and the Bank of Thailand intervened with $5 billion in foreign exchange to buy a large amount of Thai baht to protect it from depreciation. In June, the Thai baht continued to fall, and the Governor of the Central Bank of Thailand and the Minister of Finance resigned.
As a result, the myth of economic prosperity in Southeast Asia was hit, and the Thai baht depreciated by more than 38%. Related to this, since July, the Indonesian rupiah has fallen by 265,438+0%, while the Malaysian ringgit and Philippine peso have depreciated by about 65,438+05%. Malaysian Prime Minister Mahathir regarded the financial turmoil as a war. He said that western countries are jealous of the speed of economic development in Southeast Asia and "let us swallow our pride" in traditional dictatorial ways, including devaluing Malaysia's currency. He said: "Western countries are now trying to use their wealth and economic strength to implement their new colonial policy in order to enslave us again." Mahathir called western speculators "raped" his motherland, and he called Soros a "madman" and a "criminal", although Soros repeatedly insisted that he did not participate in financial speculation in Southeast Asia.
In fact, when the export volume dropped sharply from 65,438 to 0,996, the Thai government could have lowered the interest rate, but they were afraid that the foreign debt of 90 billion dollars would increase, so they adopted the policy of protecting the Thai baht. European economic analysts said that this is equivalent to sending an invitation letter to financial speculators. No one believes that Soros will ignore such an invitation.
On September 2 1 day, at another World Bank seminar entitled "Towards a Global Open Society", Soros retorted. He said that Mahathir's remarks about banning currency trading were not worthy of serious consideration. He said that in the past two months, he didn't sell ringgit, but bought something, so he didn't control the market as some people thought. He cited a series of economic data to show that the decline of ringgit has its inevitable reasons, and Mahathir and his government should be responsible for it.
As if to prove Soros's point, on September 22nd, the Malaysian ringgit fell to an all-time low against the US dollar. Insiders commented that this was caused by Mahathir's speech at the World Bank meeting. In the face of the same crisis, the silence of Thailand and the Philippines restored investors' confidence, and the war of words was not good for Malaysia's economy. Soros's attitude actually has more influence on Malaysia's economy than Mahathir.
It is estimated that Thailand's foreign exchange reserves lost $654.38+0.5 billion in the "Thai Baht Defence War" in summer, and Mahathir was furious because the financial turmoil "set back Malaysia's economic situation by 654.38+00 years". Just like a war without smoke, the loser loses money and the beneficiary shows the way. There are no planes, missiles and tanks in the economic field, but money is in the war, and there is no concept of territory, but there is also a contest between "invaders" and "defenders". If there is no ideology mixed in it, then Soros is just playing a massive game. But now, the game is not fun.