Asian Financial Crisis
The Asian Financial Crisis was a period of financial crisis and currency devaluations that gripped much of Asia beginning in July 1997, and raised fears of a worldwide economic meltdown due to financial contagion. It is also called the "Asian Contagion". The currency markets first failed in Thailand as the result of the government's decision to no longer peg the local currency to the U.S. dollar. Currency declines spread rapidly throughout South Asia, in turn causing stock market declines, reduced import revenues, protectionism and even government upheaval.
The Asian Financial Crisis was stemmed somewhat by financial intervention from the International Monetary Fund and the World Bank. Although most of the governments of Asia had seemingly sound fiscal policies, the International Monetary Fund (IMF) stepped in to initiate a $40 billion program to stabilize the currencies of South Korea, Thailand, and Indonesia, economies particularly hard hit by the crisis. However, market declines were also felt in the United States, Europe and Russia as the Asian economies slumped.