May 14, 1997
Thailand, with the intervention of Singapore, spends billions of dollars of its
foreign reserves to defend the Thai baht against speculative attacks. |
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July 2, 1997
Thailand devalues the baht. News of the devaluation drops the value of the
baht by as much as 20%--a record low. The Thai government requests "technical
assistance" from the International Monetary Fund (IMF).
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July 8, 1997
Malaysia's central bank intervenes to defend its currency, the ringgit.
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July 11, 1997
The Philippine peso is devalued.
Indonesia widens its trading band for the rupiah in a move to discourage
speculators.
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July 18, 1997
The IMF announces that it will make more than a billion dollars available to
the Philippines to help relieve pressure on the peso. The IMF action is the
first use of its "emergency funding mechanism."
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July 24, 1997
The Singapore dollar starts a gradual decline.
Malaysian Prime Minister Mahathir Mohamad accuses "rogue speculators" for
Southeast Asia's economic upheaval. He later singles out billionaire financier
George Soros.
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August 5, 1997
Thailand agrees to adopt tough economic measures proposed by the IMF in return
for a $17 billion loan from the international lender and Asian nations.
The Thai government closes 42 ailing finance companies and imposes tax hikes as
part of the IMF's insistence on austerity.
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August 14, 1997
Indonesia abandons the rupiah's trading band and allows the currency to float
freely, triggering a plunge in the currency.
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Oct. 8, 1997
Indonesia asks the IMF and World Bank for help after the rupiah falls more than
30% in two months, despite interventions by the country's central bank to prop
up the currency.
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Oct. 23, 1997
Hong Kong's stock index falls 10.4% after it raises bank lending rates to 300%
to fend off speculative attacks on the Hong Kong dollar. The plunge on the
Hong Kong Stock Exchange wipes $29.3 billion off the value of stock shares.
The South Korean won begins to weaken.
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Oct. 27, 1997
Rattled by Asia's currency crisis, the Dow Jones Industrial Average plummets
554 points for its biggest point loss ever. Trading on US stock markets is
suspended.
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Oct. 31, 1997
The IMF agrees to a loan package for Indonesia that eventually swells to $40
billion. In return, the government closes 16 financially insolvent banks and
promises other wide-ranging reforms.
The IMF announces that it will delay a $700 million quarterly disbursement to
Russia due to the country's lax tax collection.
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Nov. 3, 1997
Sanyo Securities Co. Ltd., one of Japan's top 10 brokerage firms, goes bankrupt
with liabilities of more than $3 billion. It is the first Japanese securities
house to go bust since World War II.
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Nov. 17, 1997
Hokkaido Takushoku Bank Ltd., one of Japan's top 10 banks, collapses under a
pile of bad loans.
The Bank of Korea abandons its effort to prop up the value of the won, allowing
it to fall below 1000 against the dollar, a record low.
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Nov. 21, 1997
South Korea requests IMF aid.
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Nov. 22, 1997
South Korean nationalists criticize the IMF loan request as humiliating.
President Kim Young Sam apologies on television to the country for South
Korea's economic malaise.
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Nov. 23, 1997
At the Asia-Pacific Economic Cooperation (APEC) summit in Vancouver, President
Clinton describes the Southeast Asian economies as temporarily experiencing a
"few glitches in the road."
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Dec. 3, 1997
The IMF approves a $57 billion bailout package to South Korea, the largest in
history. President Bill Clinton earlier urges "tough medicine" for South Korea.
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Dec. 8, 1997
The Thai government announces that it will close 56 insolvent finance companies
as part of the IMF's economic restructuring plan. 30,000 white-collar workers
lose their jobs. Michel Camdessus, the IMF's managing director, praises
Thailand for "solid progress."
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Dec. 12, 1997
The IMF restarts its loan disbursement to Russia. The pact releases
$700 million delayed in October. In the accord, the IMF urges Russia to boost
revenues and cut spending.
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Dec. 18, 1997
Kim Dae Jung becomes South Korea's first president elected from the country's
opposition party. Within days, the South Korean won hits new lows.
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Dec. 23, 1997
In an unprecedented move, the World Bank releases an emergency loan of $3
billion, part of a $10 billion support package, to South Korea to help salvage
its economy.
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Dec. 24, 1997
Seoul wins an early payment of $10 billion in loans from the IMF and Group of
Seven (G-7) to forestall a default on its short-term loan debts. In return for
the aid, South Korea agrees to expedite financial reforms and open its domestic
financial markets.
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Jan. 7, 1998
In a speech given in Helsinki, Finland, chief economist of the World
Bank, Joseph Stiglitz, breaks with orthodoxy and questions the assumptions and
effects of the "Washington Consensus.".
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Jan. 8, 1998
International creditors agree to a 90-day rollover of South Korea's short-term
debt.
The Indonesian rupiah nose-dives to an all-time low after Indonesian President
Suharto unveils his state budget plan. Critics say that the unrealistic budget
does not comply with the IMF's reform program.
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Jan. 8-9, 1998
Indonesians clear store shelves of food and staple goods fearing that further
currency declines will lead to food shortages.
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Jan. 10, 1998
Pressured by the IMF to take strong measures against Indonesia's ongoing
economic decline, Suharto postpones 15 major government-subsidized projects--a
number of them linked to members of the Suharto family--to help cut
expenditures and foreign debt.
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Jan. 12, 1998
Asia's largest private investment bank, the Hong Kong-based Peregrine
Investments, files for liquidation. The company is left badly exposed from its
loan investments in Indonesia.
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Jan. 13, 1998
Students in Jakarta rally to protest against the IMF-imposed policies.
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Jan. 14, 1998
South Korean labor unions agree to discuss layoffs with businesses and
government leaders. Layoffs are a key condition insisted upon by the IMF in
exchange for the fund's record $57 billion aid package. IMF chief Michel
Camdessus defends the IMF's demand for mass layoffs saying that they are the
only way Seoul can restore its financial credibility and draw in foreign
investment.
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Jan. 15, 1998
Suharto signs a new loan deal with the IMF agreeing to eliminate the country's
monopolies and state subsidies. Prices for basic food staples increase by as
much as 80%. The IMF signing follows a week of the rupiah's free-fall--10,000
to the dollar--which prompts waves of panic buying in Indonesia.
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Jan. 22, 1998
Officials from South Korea meet with international bankers in New York in an
effort to restructure the country's short-term debt.
Indonesia's currency plunges to a new all-time low--12,000 rupiah against the
dollar--amid anxiety over Suharto's apparent choice for vice
president--Technology Minister Bacharuddin Jusuf Habibie.
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Jan. 28, 1998
International banks and South Korea agree on a plan to exchange $24 billion of
short-term debt for longer-term loans.
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Feb. 6, 1998
South Korean unions, government and businesses reach a landmark agreement to
legalize layoffs. The legislation is ratified by Seoul's National Assembly.
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Feb. 19, 1998
Camdessus announces that he will extend the IMF's loan program to Russia by one
year. He also says that the IMF will relax the stringent tax-revenue targets
that have been used as a criteria for awarding loans to Russia.
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March 9, 1998
The IMF announces that is delaying a $3 billion installment of its $40 billion
loan package to Indonesia, citing Suharto's unwillingness to implement his side
of the deal. This prompts a charge from Suharto that the IMF reforms are
"unconstitutional."
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March 11, 1998
Suharto is sworn in for a seventh five-year term as president of Indonesia.
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March 23, 1998
Russian President Boris Yeltsin abruptly dismisses his entire cabinet,
including Prime Minister Viktor Chernomyrdin. Yeltsin appoints Energy Minister
Sergei Kirienko as acting premier.
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March 24, 1998
The US announces that it will send $70 million in food and medical emergency
aid to Indonesia, despite the fact that the IMF had suspended its loan package.
The US emergency aid is intended to quell the increasing food riots.
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April 8, 1998
Indonesia and the IMF reach a third pact in six months for a bailout. Both
sides make concessions: the IMF withdraws its mandate that the government
dismantle its subsidies of food and fuel, Suharto agrees to close more
insolvent banks. IMF Deputy Director Stanley Fischer declares "the
worst of the crisis is over."
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May 4, 1998
The IMF resumes a stalled lending program to Indonesia, approving a payment of
$1 billion.
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May 5, 1998
Students in Indonesia hold demonstrations across the country, protesting steep
fuel and energy price hikes. Student protests denounce the Suharto
administration for its failed economic policies and demand extensive political
reforms.
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May 12, 1998
In Indonesia, troops fire into a peaceful protest at a Jakarta university,
killing six students and sparking a week of riots.
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May 19, 1998
Suharto attempts to assuage student demonstrators by promising early elections.
The students reject his proposals. Suharto's key parliamentary allies call for
his resignation.
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May 21, 1998
Suharto resigns after 32 years in power. Vice President Habibie succeeds as
president.
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May 22, 1998
The IMF indefinitely postpones aid disbursement to Indonesia of $1 billion
scheduled for June 4. US Treasury Secretary Robert Rubin says the aid should
be delayed until the political situation stabilizes.
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May 27, 1998
Russia's financial system is stretched to the breaking point as
panic-striken stock and bond markets continue to plunge, forcing the central
bank to triple interest rates to 150% to avert a collapse of the ruble.
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May 27-28, 1998
A two-day, nation-wide strike is held in South Korea by union workers to
protest the growing wave of unemployment in the country. Since February, South
Korean companies have been laying off 10,000 workers per day.
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June 1, 1998
Russia's stock market crashes and Moscow's cash reserves dwindle to $14 billion
amid unsuccessful attempts to prop up the ruble and pay off burgeoning debts.
President Clinton pledges support for Yeltsin.
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June 12, 1998
Japan announces that its economy is in a recession for the first time in 23
years.
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June 17, 1998
The yen's fall to levels near 144 to the dollar rattles Wall Street, prompting
the US Treasury and Federal Reserve to intervene to prop up the yen. Japan and
the US spend some $6 billion to buy yen in order to strengthen it. Clinton
calls on Tokyo to quickly resolve its banking problems and stimulate the
economy.
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June 24, 1998
Russian Prime Minister Sergei Kirienko submits a budget austerity plan to the
IMF, which releases a previously held loan installment of $670 million.
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June 25, 1998
Indonesia and the IMF announce a fourth agreement to rescue an economy quickly
sinking into chaos. The IMF agrees to restore subsidies for food and fuel and
provide another $4 billion to $6 billion for basic necessities.
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July 1, 1998
Russia's lower house of parliament, the Duma, postpones action on spending and
tax reforms needed to close the budget deficit and qualify for IMF loans.
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July 6, 1998
Moscow's markets get pummeled as the government fails to raise cash by selling
government shares of a state-owned oil company. Moscow hints that an IMF loan
agreement is near.
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July 10, 1998
President Clinton calls on the IMF to quickly conclude negotiations over
emergency loans for Russia after getting a call for help from Boris Yeltsin,
sparking a rally in Moscow's markets.
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July 13, 1998
The IMF announces a package of $23 billion of emergency loans for Russia. The
international lender dips into an emergency line of credit to provide its share
of financing. Russian stocks and bonds soar.
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July 16, 1998
Russia's Duma approves some of Yeltsin's $16 billion proposed tax reforms
needed to meet conditions for IMF loans. But it rejects higher sales and land
taxes.
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July 19, 1998
Yeltsin vetoes tax cuts approved by parliament and issues decrees imposing a 3%
tax on imports and quadrupling land taxes to close the budget deficit and
secure IMF loans. He also pledges renewed efforts to collect taxes.
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July 20, 1998
The IMF gives final approval to a $22.6 billion loan package to Russia.
However, because the Duma fails to enact some of the austerity measures
mandated in the loan agreement, the first two planned installments are reduced
from $5.6 billion to $4.8 billion.
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July 28, 1998
The IMF announces that it will ease conditions on its $57 billion aid package
to South Korea which had been blamed for rising unemployment and overburdened
welfare programs.
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August 3, 1998
Wall Street reacts to the deepening crisis; the Dow plunges 300 points in its
third-biggest loss.
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August 4, 1998
Amid speculation that China will be forced to devalue its currency, Hong Kong's
dollar and stock market come under attack.
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August 6, 1998
The World Bank approves a $1.5 billion loan for Russia as Moscow puts pressure
on striking miners and tax deadbeats in an effort to put its finances in
order.
Asian markets plummet as Hong Kong and China step in to defend their currencies
against attack.
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August 11, 1998
The Russian market collapses. Trading on the stock market is temporarily
suspended. World markets are rocked by fears of a financial meltdown in Asia
and Russia.
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August 13, 1998
Russia's markets collapse on fears that Moscow will run out of money and
default.
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August 14, 1998
Yeltsin calls for an emergency session of parliament and declares that "there
will be no devaluation" of the ruble.
In Hong Kong, authorities spark a stock rally by moving to foil speculators
with surprise purchases of stocks and dollars.
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August 17, 1998
Russia announces a devaluation of the ruble and 90-day moratorium on foreign
debt repayment, triggering panic in Moscow as Russians line up to buy dollars.
Western leaders denounce the Russian default.
Latin American stock and bond markets plunge on fears of default and
devaluation in South America.
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August 19, 1998
Russia fails to pay its debt on GKO or treasury bills, officially falling into
default. The IMF and Group of Seven (G-7) say they won't provide additional
loans to Russia until it meets existing promises.
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August 21, 1998
Russia's economic crisis shakes world markets, bulldozing stocks and bonds in
Latin American and reverberating through the US and Europe. Russia's Duma
calls for Yeltsin's resignation. Investors pile into US Treasury bonds as a
safe haven from the storm, causing yields to drop to record lows.
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August 24, 1998
Yeltsin dismisses Kirienko and names Viktor Chernomyrdin as primeminister.
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August 31, 1998
After weeks of decline, Wall Street is overwhelmed by the turmoil in Russia and
world markets. The Dow Industrial average plunges 512 points, the second-worst
point loss in the Dow's history.
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Sept. 4, 1998
Federal Reserve Chairman Alan Greenspan says that the US is ready to cut
interest rates to keep the crisis from snuffing out US growth. "It is just not
credible that the United States can remain an oasis of prosperity," he says.
Latin stocks and bonds plummet.
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Sept. 7 or 8, 1998
Russia's Duma rejects Prime Minister-designate Chernomyrdin and the central
bank chairman resigns, deepening the country's political and economic turmoil.
Russian investors and lenders estimate their losses at $100 billion.
The Dow surges 381 points after Greenspan suggests that policy makers are
considering an interest cut.
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Sept. 10, 1998
The Dow loses 249 points as Brazilian stocks fall 16%, adding to drops that
have erased half the Brazil market's value. In Mexico, the Central Bank sells
some $50 million in its first attempt to buoy the peso in three years.
Yeltsin nominates Yevgeny Primakov as prime minister.
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Sept. 11, 1998
The IMF announces that the debacle in Latin American markets is "an
overreaction to Russian events" and that it is ready to lend Latin American
countries, using an emergency line of credit. Investors flee Brazil, drawing
out more than $2 billion a day despite an interest rate rise to 50% by the
Central Bank.
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Sept. 17, 1998
Tokyo's Nikkei index hits a 12-year low amid steep declines in Hong Kong,
France, Britain and the US. The Dow drops 216 points. Congress blocks
Clinton's request for $18 billion in funding for the IMF.
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Sept. 23, 1998
Pushed by the New York Federal Reserve, a consortium of leading US financial
institutions provides a $3.5 billion bailout to Long Term Capital Management,
one of the largest US hedge funds, amidst fears that a collapse could worsen
the panic in the financial markets.
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Sept. 24, 1998
Stocks on Wall Street and in Europe swoon amid fears that the losses suffered
by the world's largest banks in the Long Term Capital debacle could put the
entire banking system at risk.
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Sept. 29, 1998
The Fed cuts interest rates by a quarter point.
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Sept. 30, 1998
Worries that the Fed isn't doing enough to rescue the US and global economies
cause a 238-point drop in the Dow, for a loss of more than 500 points in a
week. Investors around the world flock to US Treasury bonds for safety,
causing the yield on 30-year bonds to drop below 5% for the first time in three
decades.
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Oct. 3, 1998
Japan announces a $30 billion aid package for Southeast Asia to help the region
recover from recession.
G-7 ministers create a rescue plan for Brazil.
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Oct. 5-8, 1998
In Washington, the IMF and World Bank hold a joint plenary session to debate
the global economic crisis.
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Oct. 15, 1998
The Fed cuts interest rates for a second time to prevent weak financial markets
from tripping the US into a recession. The Dow shoots up 331 points and world
markets rally.
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Oct. 22, 1998
Amid warnings of winter food shortages in Russia, Moscow creates an emergency
food reserve and approves an emergency spending plan that will require the
central bank to print at least $1.2 billion to help pay back wages, rescue
banks and bring food to desperate regions.
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Oct. 27, 1998
Brazil's President Fernando Cardoso announces an austerity plan of $80 billion
in tax increases and spending cuts over three years in order to secure an IMF
assistance package.
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Oct. 31, 1998
The IMF refuses to disburse to Russia a $4.3 billion installment of the $22.6
aid package it agreed to in July, and says it will not resume negotiations
about disbursement until Russia produces a realistic budget for 1999.
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Nov. 5, 1998
Russia strikes an agreement with foreign investors to accept repayment in
rubles of $40 billion of debt frozen in August, but says it will not be able to
repay $17.5 billion of debts due in 1999 and will reschedule them. Russia also
wins an $800 million loan from Japan, originally part of the IMF rescue
deal.
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Nov. 6, 1998
The US agrees to provide 3.1 million tons of food to Russia to help offset
Russia's worst grain harvest in 45 years and declining food imports because of
the fall of the ruble.
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Nov. 13, 1998
The IMF, World Bank and leading industrial nations announce a $41.5 billion
rescue package for Brazil.
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Nov. 17, 1998
The Fed, citing "unusual strains" in the credit markets, cuts interest rates
for a third time in seven weeks.
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Dec. 2, 1998
The World Bank projects that the crisis has cut world growth in half, to around
2%, and that unless Japan reverses the decline of its economy, the world could
fall into recession in 1999.
Official studies report that 80 million Indonesians--or 40% of the population--
have fallen below the poverty line since the start of the economic crisis.
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Dec. 3, 1998
In Brazil, the congress rejects a key social security tax increase sought by
the IMF, prompting a rout in Brazilian markets and stock sell-offs throughout
Latin America and on Wall Street.
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Jan. 15, 1999
The Brazilian government allows its currency, the real, to float freely on
world markets by lifting exchange controls. The move leads to a surge in
markets in Latin America and around the globe as investors buy up Brazilian
stocks at reduced prices.
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Jan. 27, 1999
Brazil's central bank raises interest rates in an effort to stabilize the
market and to stem capital flight which has reached $200 million to $500
million a day.
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Feb. 2, 1999
Arminio Fraga, a former portfolio manager to billionaire George Soros, is named
president of Brazil's Central Bank.
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March 25, 1999
The IMF approves a $1 billion increase in its emergency loan package for
Indonesia. The fund also approves the release of a $460 million installment
that it had held back due to Indonesia's delay in closing down insolvent
banks.
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March 29, 1999
The Dow Jones Industrial Average closes above the 10,000 level for the first
time in its history.
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May 12, 1999
The Dow Jones Industrial tops 11,000.
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