The large exchange rate depreciations which preceded the Asian Crisis was likely the result of

Question

Quizplus · Accepted Answer

The large exchange rate depreciations preceding the Asian Crisis were mainly due to the significant decrease in foreign investors' demand for Asian currencies. This resulted from their concern over the high levels of debt accumulation and the possibility of default by the affected Asian countries. The decrease in demand for Asian currencies also led to a decrease in their value relative to other currencies, leading to the depreciation of exchange rates.

The Large Exchange Rate Depreciations Which Preceded the Asian Crisis