Soros used US dollars, US debt or other US dollar assets as pledge loans, borrowed a lot of Thai baht from banks in Thailand, and then sold it in the foreign exchange market to buy US dollars. Because Soros sold a lot of Thai baht in batches, it was easy to cause panic in the foreign exchange market, which made everyone think that there was something wrong with the Thai baht and there was a danger of collapse, so the Thai baht exchange rate plummeted.

Soros's usual practice is to short-sell overvalued assets or currencies once an unsustainable asset price bubble is discovered, thus devaluing them and making huge profits. If market panic and investor pessimism lead to "herd effect", its firepower is enough to form a fierce impact on the target.

Extended data:

Soros finally succeeded in capturing Thailand, not only because of the cooperation of other speculative forces, but also because of the relevant policies of his country. During the attack, Thailand implemented the following policies:

(1) First, intervene in the forward market, sell forward dollars in large quantities and buy Thai baht.

(2) The second is to join the monetary authorities of Singapore, Hong Kong and Malaysia to intervene in the spot market and spend $654.38+0 billion to buy Thai baht; (3) domestic banks are prohibited from lending Thai baht to international speculators; The fourth is to substantially increase the overnight lending rate.

(4) In addition, the Thai government has taken many extreme measures, including intimidating and luring Thai banks to provide customer information of forward foreign exchange contracts; Threatened to crack down on the media that published negative news, and dispatched police to track down those who published negative news.

But all this is too late, and the Thai baht has fallen into the trap set by speculators. ?

Baidu Encyclopedia-1997 Asian financial crisis