Indonesia, South Korea and Thailand are the countries most affected by the financial turmoil. Singapore, Malaysia, the Philippines and Hong Kong have also been affected. Chinese mainland and Taiwan Province provinces are less affected, but Taiwan Province province is threatened by the "local financial storm". Japan, however, is still in its own long-term economic predicament after the collapse of the bubble economy, and is not greatly affected by the financial turmoil.
From 65438 to 0997, Thailand's economy was weak, and many Southeast Asian countries such as Thailand, Malaysia and South Korea relied on short-term and medium-term foreign debts for a long time to maintain the balance of payments. The exchange rate is very high, and most countries maintain a fixed or linked exchange rate with the US dollar or a basket of currencies, which provides good hunting opportunities for international speculative funds. The quantum fund headed by the famous American speculator Soros took advantage of the situation to enter Thailand, starting with a large number of short selling of Thai baht, forcing Thailand to abandon the long-term fixed exchange rate linked to the US dollar and float freely, thus triggering an unprecedented crisis in Thailand's financial market. After that, the crisis quickly spread to all countries and regions with freely convertible currencies in Southeast Asia, and the Hong Kong dollar in Hong Kong became the most expensive currency in Asia.
In August, 1998, Quantum Fund and Tiger Fund began to speculate in Hong Kong dollars. At first, they borrowed a lot of Hong Kong dollars from banks, sold them in the market, converted them into dollars and lent them out to earn interest, and sold a lot of Hong Kong stock futures. The former will lead to a sharp rise in interest rates, leading to a decline in the stock market, thus making profits in the futures market; At the same time, once the Hong Kong dollar falls, they can also make profits in the foreign exchange market, killing two birds with one stone. As a result, the Hong Kong Government raised interest rates substantially, reaching 300% in overnight rate, using nearly HK$ 654.38+02 billion (about US$ 654.38+05 billion) in foreign exchange reserves and buying a large number of Hong Kong stocks. As a result, speculators were forced to close their positions at a high price on August 28, and the losses were serious. In addition, they were frustrated in Russia and Malaysia at the same time and finally retreated. In this campaign, the Hong Kong government used a lot of foreign exchange reserves to invest in the stock market. At one time, it occupied 7% of the market value of Hong Kong stocks and became a major shareholder of some companies. Once the stock market falls, the linked exchange rate may collapse. Therefore, by June 1999 1 1, the Hong Kong stocks purchased by the Government will be listed on TraHK and sold back to the market in batches.
The crisis forced all the major currencies in Southeast Asia to depreciate sharply in a short time, and the collapse of the monetary system and stock market in Southeast Asian countries, as well as the huge pressure of foreign capital withdrawal and domestic inflation caused by it, cast a shadow over the economic development of this region.