Policy Response to the Asian Financial Crisis: An Overview of the Debate and the Next Steps

Abstract

The principal responsibility for dealing with the Asian crisis at an international level was assumed by the International Monetary Fund (IMF), the institution charged with safe¬guarding the stability of the international financial system. The IMF's goal was to quickly restore confidence in the three hardest hit Asian economies—Indonesia, Korea, and Thailand—through a combination of tough economic conditionalities and substantial fi¬nancial support. In 1997 the IMF approved $35 billion in loans for these countries, and in addition, mobilized commitments worth $77 billion from the Asian Development Bank (ADB), the World Bank, and bilateral sources. In 1998 the IMF arranged further loans worth $6.3 billion for Indonesia.