ket economies were a major engine for growth in the world economy. In the document the IMF claims that there are three things that caused the present situation. The failure to stop recognizable problems that were occurring in Thailand and many other countries in the region that were based on external deficits, property and the stock markets. The second problem is what I already mentioned earlier in this paper. The maintenance of pegged exchange rate system for too long. There was excessive exposure to foreign exchange risk in the financial and corporate sector because of the long period of pegging. The third is due to the "lax prudential rules", which caused sharp deterioration in the quality of banks' loan portfolios. The authorities were a problem as well. They refused to carry out actions that would release the pressures on the currencies and the stock markets. They were reluctant to tighten monetary conditions and also to close financial institutions. These actions or should I say lack of actions added to the already growing problems. Weaknesses in the Thai economy were revealed because of the domestic and external shocks. Before the unveiling of the weaknesses in the Thai economy, they were doing very well. " Thai economy had been masked by the rapid pace of economic growth and the weakness of the US dollar to which the Thai currency, the ...
