Timeline Of The Crash | The Crash | FRONTLINE
Publish date: 2024-08-05
Thailand, with the intervention of Singapore, spends billions of dollars of its foreign reserves to defend the Thai baht against speculative attacks.
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).
Malaysia's central bank intervenes to defend its currency, the ringgit.
The Philippine peso is devalued.
Indonesia widens its trading band for the rupiah in a move to discourage speculators.
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."
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.
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.
Indonesia abandons the rupiah's trading band and allows the currency to float freely, triggering a plunge in the currency.
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.
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.
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.
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.
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.
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.
South Korea requests IMF aid.
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.
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."
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.
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."
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.
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.
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.
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.
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.".
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.
Indonesians clear store shelves of food and staple goods fearing that further currency declines will lead to food shortages.
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.
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.
Students in Jakarta rally to protest against the IMF-imposed policies.
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.
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.
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.
International banks and South Korea agree on a plan to exchange $24 billion of short-term debt for longer-term loans.
South Korean unions, government and businesses reach a landmark agreement to legalize layoffs. The legislation is ratified by Seoul's National Assembly.
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.
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."
Suharto is sworn in for a seventh five-year term as president of Indonesia.
Russian President Boris Yeltsin abruptly dismisses his entire cabinet, including Prime Minister Viktor Chernomyrdin. Yeltsin appoints Energy Minister Sergei Kirienko as acting premier.
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.
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."
The IMF resumes a stalled lending program to Indonesia, approving a payment of $1 billion.
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.
In Indonesia, troops fire into a peaceful protest at a Jakarta university, killing six students and sparking a week of riots.
Suharto attempts to assuage student demonstrators by promising early elections. The students reject his proposals. Suharto's key parliamentary allies call for his resignation.
Suharto resigns after 32 years in power. Vice President Habibie succeeds as president.
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.
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.
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.
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.
Japan announces that its economy is in a recession for the first time in 23 years.
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.
Russian Prime Minister Sergei Kirienko submits a budget austerity plan to the IMF, which releases a previously held loan installment of $670 million.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Wall Street reacts to the deepening crisis; the Dow plunges 300 points in its third-biggest loss.
Amid speculation that China will be forced to devalue its currency, Hong Kong's dollar and stock market come under attack.
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.
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.
Russia's markets collapse on fears that Moscow will run out of money and default.
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.
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.
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.
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.
Yeltsin dismisses Kirienko and names Viktor Chernomyrdin as primeminister.
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.
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.
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.
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.
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.
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.
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.
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.
The Fed cuts interest rates by a quarter point.
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.
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.
In Washington, the IMF and World Bank hold a joint plenary session to debate the global economic crisis.
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.
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.
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.
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.
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.
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.
The IMF, World Bank and leading industrial nations announce a $41.5 billion rescue package for Brazil.
The Fed, citing "unusual strains" in the credit markets, cuts interest rates for a third time in seven weeks.
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.
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.
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.
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.
Arminio Fraga, a former portfolio manager to billionaire George Soros, is named president of Brazil's Central Bank.
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.
The Dow Jones Industrial Average closes above the 10,000 level for the first time in its history.
The Dow Jones Industrial tops 11,000.
ncG1vNJzZmivp6x7sa7SZ6arn1%2BstKO0jqmYoJ2jZLOzu82to6KmlWTAqbvWrGacqpGotXCx05xmnKqfo3upwMyl