Devaluation of Asian Currencies

Less Capital Control in these Asian countries

Happened with collapse of Thailand
financial collapse of the Thai baht
From 1993 to 1996, Foreign Debt to GDP ratios rose from 100% to 167%
in the four large Association of Southeast Asian Nations (ASEAN)
economies.
Fixed regimes, however, can often lead to severe financial crises, since a
peg is difficult to maintain in the long run.
An attempt to maintain a high value of the local currency to the peg
resulted in the currencies eventually becoming overvalued.
This meant that the governments could no longer meet the demands to
convert the local currency into the foreign currency at the pegged rate.
With speculation and panic, investors scrambled to get their money out
and convert it into foreign currency before the local currency was
devalued against the peg; foreign reserve supplies eventually became
depleted.
In Thailand, the government eventually had to allow the currency to float,
and by the end of 1997, the Thai bhat had lost 50% of its value as the
market's demand and supply readjusted the value of the local currency.

Resulted In

Slumping Currencies
Devaluing assets
Rising private debt
Thailand, South Korea and Indonesia were most affected by this crisis

Remedies

IMF stepped to initiate a $40 billion program to stabilize currencies in

Thailand, South Korea and Indonesia