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Currency Crisis in Southeast Asia

Alternatively, the dollar can depreciate, and is worth less, if the number of yen it will exchange for decreases. Thus if the dollar depreciates to 115 yen, a single dollar buys fewer Japanese goods when the trade is made (McClintock, 1996, 15).

The market concept of "supply and demand" determines the exchange rate, in this case, the "supply" of the dollar versus the "demand" for the dollar. This is sometimes looked at as the "equilibrium value" at which the quantity of dollars demanded (by foreigners interested in doing business in the United States) just equals the quantity of dollars supplied (by US residents who want to do business in other countries.

With the Asian currency crisis much in the news, and a disturbing array of headlines discussing what seems to be an almost daily rush of bad news for financial advisors and managerial accountants, it is necessary to clear up what has really happened, and what that really means (Ball, Branegan, Gibson, & Satsuki, 1995, 46). This fluctuation in currency values is not the only problem facing international bankers today. Also discussed in this paper will be the fact that depositors are not content with the meager return from a savings account and are finding that they can do better elsewhere, in money-market or other mutual funds.

Corporate capital requirements are increasingly being met through bond issues and commercial paper--shorter-term IOUs issued by companies and held by investors. Banks are bu


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Currency Crisis in Southeast Asia. (1969, December 31). In Retrieved 03:45, October 24, 2014, from
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