From being best known as the starting point of the 1998 Asian Crisis, the battered Thai economy is coming back strongly. Veteran emerging markets investor Mark Mobius tells a story of success and modernisation
Thailand is where the 'Asian Crisis' started in 1997. The Thai Central Bank told everyone it would hold the exchange rate against the dollar steady at 25 baht to one greenback. At the same time the government promoted an 'offshore' financial centre. Dollars started to flow in and dollar loans were made to Thai companies in increasing amounts. Given the fact that the dollar loans were at a substantially lower interest rate than the Thai baht, about 6% versus around 13%, it made sense to borrow in US$ since there was no currency risk. Right? No, wrong. The Thai Central Bank said it would e...
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