Published on 29 Sep 2022 on Zacks via Yahoo Finance
The world economy may have fallen into conditions that were seen during the 1997 Asian Financial Crisis, thanks to aggressive interest rate hikes and a soaring dollar in the United States. But the Asian financial crisis seen in 1997 is unlikely to be repeated, per a CNBC article.
The last time the United States pushed up interest rates in such a super-hawkish manner in the 1990s, capital flew from emerging Asia into the United States. The Thai baht and other Asian currencies shattered, causing the Asian Financial Crisis.
This time, emerging Asian markets are better-positioned to survive pressures on foreign exchange rates, analysts said, as quoted on CNBC. As there are fewer foreign holdings of local assets in Asia now, any capital flights would exert less financial pressure this time around, UBS Global Wealth Management executive director for Asia-Pacific FX and macro strategist, Tan Teck Leng, told CNBC’s “Squawk Box Asia” last week.