Impact of the Asian Financial Crisis on Singapore

1.0 Introduction 1.1 Asian Financial Crisis Until 1996, some(prenominal) an(prenominal) developing countries, especially the southeastward Asian countries were developing their monetary markets, which attracted huge inflows of foreign capital. oppose with weak supervision on continued liberalization of the monetary markets, huge current look deficits, and adoption of fixed flip-flop come in body, these economies were vulnerable to unfit attacks. The Asian Financial Crisis (AFC) started from Thailand, whereby the shore and share market started declining and rumours of banks and finance companies caught in financial difficulties reap to massive currency attacks stemming from overtaking of investor confidence. 1.2 Spread of crisis The crisis spread to many neighbouring countries such as Indonesia and Philippines who were believed to drive standardized unstable frugal situations. Although capital of capital of capital of capital of Singapore did not demonstrate similar stinting situations such as current study deficits, Singapores geographical proximity with its neighbouring countries and economic dependance resulted in Singapore macrocosm hit by the crisis too. secern of current account supererogatory in Singapore is shown in Table 1. The current account balance to gross domesticated product ratio of Singapore was a 15.7% surplus in 1997, as compared to most of the otherwise crisis-affected countries which experienced deficits. Nonethe little, the impact of the crisis on Singapore was much less severe, and this report seeks to address the cardinal 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 espouse a managed float system whereby the Singapore Dollar (Sing Dollar) is allowed to flutter inside a commit band. The lead band is found on trade-weighted basket of currencies of Singapores study trading partners. To prevent investors from speculating and minify 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: Ordercustompaper.com

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