{
  "id": "98-434",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "98-434",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 105134,
      "date": "1998-09-03",
      "retrieved": "2016-05-24T20:51:53.064941",
      "title": "The Asian (Global?) Financial Crisis, the IMF, and Japan: Economic Issues",
      "summary": "The Asian financial crisis involves four basic problems or issues: (1) the role, operations, and\nreplenishment of funds of the International Monetary Fund, (2) a shortage of foreign exchange in\nThailand, Indonesia, South Korea and other Asian countries that has caused the value of currencies\nand equities to fall dramatically, (3) inadequately developed financial sectors and mechanisms for\nallocating capital in the troubled Asian economies, and (4) effects of the crisis on both the United\nStates and the world. In 1998, the crisis that had been confined primarily to Asia appeared to be\nspreading to the world. The crisis was taking global dimensions.\n  The Asian financial crisis was initiated by two rounds of currency depreciation that have been\noccurring since early summer 1997. The first round was a precipitous drop in the value of the Thai\nbaht, Malaysian ringgit, Philippine peso, and Indonesian rupiah. As these currencies stabilized\ntemporarily, the second round began with downward pressures hitting the Taiwan dollar, South\nKorean won, Brazilian real, Singaporean dollar, and Hong Kong dollar. Governments have\ncountered the weakness in their currencies by selling foreign exchange reserves and raising interest\nrates, which, in turn, have slowed economic growth and have made interest-bearing securities more\nattractive than equities. The currency crises also has revealed severe problems in the banking and\nfinancial sectors of the troubled Asian economies.\n  The International Monetary Fund has arranged support packages for Thailand ($17.2 billion),\nIndonesia ($42.3 billion), and South Korea ($58.2 billion). The packages include an initial infusion\nof funds with conditions that must be met for additional loans to be made available. The actual\nfunds disbursed to date include only those from the IMF, World Bank, and Asian Development\nBank. The United States has offered a line of credit from its Exchange Stabilization Fund for\nIndonesia and South Korea. Under separate initiatives, the U.S. Export-Import Bank and U.S.\nDepartment of Agriculture have allocated trade credits and loan guarantees to finance U.S. exports\nto the troubled Asian countries.\n  The U.S. Congress is considering the Asian financial crisis within three broad legislative\ncontexts. The first is in the financing and scope of the activities of the IMF. This includes\nlegislation to provide the IMF with a $17.9 billion increase in its quotas or capital subscriptions and\nNew Arrangements to Borrow. Questions are being asked, however, about the need for the\nadditional funding, whether the IMF creates a moral hazard, and whether the IMF should attach\ndifferent conditions to its support packages. The second legislative context is in the impact of the\ncrisis on the U.S. economy and American financial institutions. Forecasters foresee a decline in U.S.\neconomic growth of about 0.5 percentage point and an increase in the U.S. trade deficit of about $65\nbillion because of the crisis. The third context is the efforts of other countries, particularly Japan,\nin resolving the problem. Although Japan has pledged credits under the IMF support packages, its\neconomy is in recession and it has not been performing its role as an engine of growth and absorber\nof exports from its neighbors in Asia. Rather, Japan's trade surplus is rising, particularly with the\nUnited States.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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      "topics": []
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  ],
  "topics": [
    "Economic Policy",
    "Foreign Affairs",
    "Industry and Trade"
  ]
}