Currency Crisis in Korea - When and Why It Happened

Two possible causes of the Korean financial crisis are examined: (1) deterioration of the macroeconomic indicators and inconsistent policies and (2) sudden shifts in the market expectation and confidence. Although the truth seems to lie between these causes, we conclude that the Korean currency cris...

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Bibliographic Details
Published inAsia-Pacific financial markets Vol. 7; no. 1; p. 11
Main Author Kim, Suduk
Format Journal Article
LanguageEnglish
Published Dordrecht Springer Nature B.V 01.03.2000
Subjects
American dollar
Bailouts
Banking industry
Bankruptcy
Banks
Causality
Corruption
Credit ratings
Currency
Deficits
Economic crisis
Economic theory
Foreign exchange markets
Foreign exchange rates
International trade
Macroeconomics
Negative campaigning
Securities markets
Short term debt
Stock exchanges
Studies
Korea
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Summary:Two possible causes of the Korean financial crisis are examined: (1) deterioration of the macroeconomic indicators and inconsistent policies and (2) sudden shifts in the market expectation and confidence. Although the truth seems to lie between these causes, we conclude that the Korean currency crisis resulted from a serious mismanagement of foreign exchange rates and foreign currency reserves as well as the accumulation of short-term foreign debts. Although it is generally believed that the exchange rate of the won started depreciating drastically on 8 November 1997, depreciation started three months earlier when the international market conditions put the pressure on the won. [PUBLICATION ABSTRACT]
ISSN:1387-2834
1573-6946
DOI:10.1023/A:1010080402141