The Turmoil Spreads across Southeast Asia
Growing banking problems, flagging exports, plunging stock prices, and a current-account deficit force the Thais to devalue the baht by 23%. Stocks are down 25% in dollars in 1997.
Despite steep interest-rate hikes to keep the ringgit sound, the central bank stops propping up the currency on July 14 and sees it fall by more than 4%. Stocks are off 21%.
With the economy slowly on the mend from last year's slump, even the Singapore dollar-a traditional safe haven in the region-is under pressure. Earnings growth should fall in 1997. Stocks have dropped 16%.
The rupiah briefly plunges to a record low against the dollar, although the country is cited as a model of flexible currency management in the region. Despite the rupiah weakening, stocks are up 9%.
With few resources to fight back, Manila lets the peso fall 10%. It rebounds, but domestic demand will suffer. Companies facing stiff competition and rising import costs will see earnings dwindle. Stocks are down 22%.
DATA: BUSINESS WEEK
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