A second Asian Financial Crisis was said to hit the region again. The crisis would hit Asia anytime soon and was said to have started in the US. This was after the US Federal Reserve proposed stimulus reduction and end to quantitative easing.
The financial crisis is expected to occur in the next 12 to 18 months. The forecast showed that every turn of the liquidity screw could cause a new financial storm. According to India's Financial Minister P. Chidambaram, nothing can avert the financial storm.
From the experience in 1997 to 1999, all Asian countries including India had built large FOREX reserves. Countries in Asia also shifted to floating exchange rates. This made said countries more resilient to avoid collapse during these years. However, Asian countries had suffered severe financial damage regardless of their cautious move to avert the crisis.
The economic depreciation had raised the prices of almost all commodities that were either exported or imported.
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