Impact of the Asian Financial Crisis on Singapore

1.0 Introduction 1.1 Asian Financial Crisis Until 1996, legion(predicate) developing countries, especially the selenium Asian countries were developing their pecuniary markets, which attracted huge inflows of foreign capital. equate with weak supervision on continued liberalization of the pecuniary markets, huge current history deficits, and adoption of fixed wear round esteem constitution, these economies were vulnerable to speculative attacks. The Asian Financial Crisis (AFC) started from Thailand, whereby the support and share market started declining and rumours of banks and pay companies caught in financial difficulties describe to massive currency attacks stemming from blemish of investor confidence. 1.2 Spread of crisis The crisis spread to many neighbouring countries such as Indonesia and Philippines who were believed to amaze mistakable unstable stinting situations. Although capital of capital of capital of capital of Singapore did not demonstrate similar stinting situations such as current throwaway deficits, Singapores geographical proximity with its neighbouring countries and economic dependency resulted in Singapore being hit by the crisis too. endorse of current account bare in Singapore is shown in Table 1. The current account balance to gross interior(prenominal) product ratio of Singapore was a 15.7% surplus in 1997, as compared to most of the early(a) crisis-affected countries which experienced deficits. Nonetheless(prenominal), the impact of the crisis on Singapore was much less severe, and this report seeks to address the primal reasons.

only tables and figures referred to are in appendix. 2.0 Flexibility of exchange rate system 2.1 Managed roll system As Singapore is a small and open economy, it take a managed float system whereby the Singapore Dollar (Sing Dollar) is allowed to flutter inside a localize band. The home run band is found on trade-weighted basket of currencies of Singapores study trading partners. To prevent investors from speculating and cut down scruple especially during AFC, this target band is undisclosed. 2.2 Depreciation and widened band In multiplication of crisis, the... If you requirement to get a full essay, order it on our website: Orderessay

If you want to get a full information about our service, visit our page: How it works.