However, the Malaysian financial crisis can be called as the money exchange rate crisis, and banking crisis in the blogger.comlly, the crisis started from the declining exchange rates, which led the companies to go bankrupt, and created uncertainty among the foreign investors to get back their funds, and this caused the capital outflow, and created uncertainty in the market Asian financial crisis in This paper breaks new ground by focusing more on Malaysia’s part of the crisis and with a greater emphasis on finance related issues instead of presenting the usual macroeconomic and political perspectives of the events. The case of Malaysia is a unique one because of the long-term racial conflict between the Cited by: 3 II. THE FINANCIAL CRISIS IN MALAYSIA In mid-May , the Thai baht came under severe pressure from speculative at-tacks. The ringgit was also not spared, and came under severe selling pressure. Bank Negara Malaysia’s (the central bank of Malaysia) immediate response was to intervene in the foreign exchange market to uphold the value of the ringgit
Asian Financial Crisis: Impact on Malaysia Case Study Help - Case Solution & Analysis
Home » Case Study Analysis Solutions » Asian Financial Crisis Impact on Malaysia. Case Study Analysis Solutions. The economic growth is positively interlinked with the financial crisis; a financial crisis occurs due to distress in the domestic or international market.
In addition, there are factors that might have slowed down the economy of the Malaysia. However, the Malaysian financial crisis can be called as the money exchange rate crisis, and banking crisis in the country. Initially, the crisis started from the declining exchange rates, which led the companies to go bankrupt, and created uncertainty among the foreign investors to get back their funds, and this caused the capital outflow, and created uncertainty in the market. It is imperative to know where the growth exists.
The growth is interlinked with many factors as discussed above, However, we would discuss each factor in detail to identify the problem, as to why did Malaysia not achieve the growth rate as pre-crisis. During the expansion or contraction of the economy, there are four indicators that are measured over a given period suchas employment, production, sales, and personal incomes.
Thus, during the Asian financial crisis these four indicators significantly shown a recession during the time. However, as we have already discussed that unemployment rate in the country has increased, and the total domestic consumption during the recession also decreased as result of decreased personal income.
Thus, the businesses in the Malaysia have been under high economic contraction. Similarly, the business cycle consists of four economic indicators over the given period. Moreover, the recovery from the recession is not very easy, because, the Malaysia has been on high growth within the region, and it was more investment oriented country in the region, which has always influenced the investment from the domestic, and international investors.
However, after the most serious banking, and exchange rate crisis, the country could recover from the recession, but it is very difficult to grow at the same rate as it grows before the crisis. Similarly, high unemployment, and low foreign investment can only contribute to the slow growth, meanwhile, malaysia asian financial crisis forex loss, it could malaysia asian financial crisis forex loss same growth rate as pre-crisis, but it is not likely to happen suddenly.
Malaysia is an Import and export oriented country. Its trade partners include China, Singapore, United states, Japan, Thailand, Korea, and Hong Kong. Its malaysia asian financial crisis forex loss exports were electrical machinery, Chemicals, electronic items, petrochemical products, and commodities. However, the increasing competition in the market had been filled by other competitors. Similarly, malaysia asian financial crisis forex loss, many companies in the Malaysia went bankrupt to even operate, whereas, the domestic consumption decreased, and overall aggregate demand in the market increased for the products, which have been exported by the Malaysian companies.
Therefore, due to the economic contraction, and declined exchange rates, it could be said that these factors might have created more serious problems for those exporting companies, because if they had exported the products then they would have carried a huge loss due to low exchange rates as compared to the pre-crisis, malaysia asian financial crisis forex loss.
On the other hand, the company would have reduced the production or would have stopped the production in order to avoid further losses as we approached the business cycle indicator that production declines. Moreover, the most affected countries from South East Asia were Thailand, Indonesia, Philippine. Whereas, the less affected countries were Singapore, Taiwan, and South Korea, malaysia asian financial crisis forex loss, meanwhile the non-affected countries were China and Hong Kong in South East Asian region.
Barro, Furthermore, these lightly affected countries had recovered, but others were still suffering from the major economic setback. Similarly, the non-affected and slightly affected countries had been fulfilling the gap of exports in the international market. Moreover, Malaysia was in serious banking and exchange rate crisis that it could not export the products into the international market. Thus, the other counterpart had started exporting these products in the market. Charette, Consequently, Malaysia was not able to get same growth rate as it did before the crisis.
Furthermore, this was the only reason behind low growth recovery, because the aggregate demand in the market had not decreased for the products, but indeed, the supply had decreased.
Therefore, the other competitors in the market had taken advantage from the financial crisis of the Malaysia. Malaysia has been an investment oriented country, where it has been giving relief to the foreign investors. On the other hand, many foreign investments companies haveinvested in the many companies, and banks through direct or by the investment in the stock exchange.
However, their intention of the investment was not for long-term investment, instead they had mind for short-term investment as they knew that the country does not have proper regulatory authority, and law and enforcement, which can look in the investments matters. Similarly, there was lack of risk management, because no proper research was done upon the project before the investment, malaysia asian financial crisis forex loss.
This confidence was from the high growth of the country. Thus, the declining currency rates were not attractive to the investor hence, the investors turned to another market. Consequently, foreign direct investment was also affect by these crisis, which slowed the economic growth of the country.
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, time: 1:27Financial Market Analytics: How Malaysia Handle the Asian Financial Crisis - Final Part
However, the Malaysian financial crisis can be called as the money exchange rate crisis, and banking crisis in the blogger.comlly, the crisis started from the declining exchange rates, which led the companies to go bankrupt, and created uncertainty among the foreign investors to get back their funds, and this caused the capital outflow, and created uncertainty in the market 08/04/ · The then Prime Minister of Malaysia, Dr Mahathir Mohammed imposed strict financial regulations hoping to kerb the outflow of capital and pegged the Ringgit to against the U.S dollar after the ringgit had depreciated from to within 7 months resulting in a loss of value of over 50% Asian financial crisis in This paper breaks new ground by focusing more on Malaysia’s part of the crisis and with a greater emphasis on finance related issues instead of presenting the usual macroeconomic and political perspectives of the events. The case of Malaysia is a unique one because of the long-term racial conflict between the Cited by: 3
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