rise in value led to the Asian countries decrease in exports. Their exports became less demanded and competitive in the worlds market. For the economies to come out of the crisis and return to their normal sale of exports, they had three options. They would have to let go of the dollar value, wait for the dollar to depreciate against other currencies or buy local currency from the moneylenders. They couldn't wait for the dollar to depreciate because they were unsure of how long it might take. At first the Asian countries borrowed money from the IMF and World Bank in dollars, because they did not have any fears about earning money in local currency to repay the debts. The Asian governments were afraid of devaluing their currency by unpegging the currency to the dollar. They were afraid of destroying firms and industries that borrowed large amounts of money from the banks. The industries would have a harder time trying to pay off the debt because the value of their exports would decrease. They had no choice but to look to the moneylenders for help. The moneylenders sold large amounts of local currencies to the countries hoping that they would be able to buy the currency for cheaper before they were to deliver it. The sales the moneylenders made were forward sales, which are sales with guaranteed delivery a month or so from the day. If they su...
