Impact of the Asian Financial Crisis on Singapore

1.0 Introduction 1.1 Asian pecuniary Crisis Until 1996, many developing countries, especially the southeastward Asian countries were developing their fiscal markets, which attracted huge inflows of orthogonal capital. mate with weak supervision on continued easiness of the financial markets, huge original vizor deficits, and adoption of doctor flip-flop rate system, these economies were vulnerable to speculative attacks. The Asian Financial Crisis (AFC) started from Thailand, whereby the prop and shargon market started declining and rumours of banks and finance companies caught in financial difficulties guide to massive currency attacks stemming from loss of investor confidence. 1.2 Spread of crisis The crisis blossom to many neighbouring countries such as Indonesia and Philippines who were believed to have similar explosive frugal situations. Although capital of capital of capital of Singapore did not border similar stinting situations such as current figure defici ts, Singapores geographical proximity with its neighbouring countries and economic dependence resulted in Singapore being hit by the crisis too. Evidence of current account surplus in Singapore is shown in Table 1. The current account balance to gross domestic product proportionality of Singapore was a 15.7% surplus in 1997, as compared to well-nigh of the other crisis-affected countries which experienced deficits. Nonetheless, the impact of the crisis on Singapore was more than less severe, and this report seeks to address the underlying reasons. only tables and figures referred to are in appendix. 2.0 Flexibility of exchange rate system 2.1 Managed avow system As Singapore is a small and blossom forth economy, it adopted a managed float system whereby the Singapore dollar mark (Sing Dollar) is allowed to fluctuate inside a target surround. The target band is based on trade-weighted basket of currencies of Singapores major trading partners. To obstruct investors from spec ulating and reducing scruple especially dur! ing AFC, this target band is undisclosed. 2.2 dispraise and widened band In times of crisis, the... If you requirement to get a full essay, order it on our website: BestEssayCheap.com

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