The Asian miracle turned into a nightmare in 1997. Thailand triggered the region-free case, when the baht was decoupled from the U.S. dollar in July. This sent other Asian currencies tumbling as speculators took advantage of profit opportunities. Hong Kong was not immune to the regional suffering. The first attack on the Hong Kong dollar began in earnest in October 1997. As the Asian crisis worsened, deepened the impact on the HKSAR. Hong Kong’s stock market took a pounding as speculators mounted t … Read more »

The Asian miracle turned into a nightmare in 1997. Thailand triggered the region-free case, when the baht was decoupled from the U.S. dollar in July. This sent other Asian currencies tumbling as speculators took advantage of profit opportunities. Hong Kong was not immune to the regional suffering. The first attack on the Hong Kong dollar began in earnest in October 1997. As the Asian crisis worsened, deepened the impact on the HKSAR. Hong Kong’s stock market took a pounding mounted as speculators three other attacks in 1998. Faced with this scenario, and the prospect of a worsening of the economy, 14 August 1998, the Government believes that a passive control changes to an active market participants by accumulating large positions in local blue-chip stocks.
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from
John Whitman,
Mary J. Cascales
Source: University of Hong Kong
15 pages.
Release Date: 1 January 1999. Prod #: HKU031-PDF-ENG
Hong Kong Financial Crisis – 1997-1998 HBR case solution

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