♤ The currency markets first failed in Thailand as the result of the government's decision to no longer peg the local currency to the U.S. dollar (USD).

♤ Almost all countries suffered from a loss of demand and confidence in the region.

♤ It is believed that weak Asian financial systems caused this crisis. The weaknesses of the financial sector were masked by rapid growth and accentuated by large capital inflows, which were partly encouraged by pegged exchange rates.