currency crises
National money meltdowns
Currency crises occur when a nation's currency rapidly loses value against other currencies, often triggering capital flight and economic instability.
Governments may exhaust foreign reserves defending the exchange rate, or be forced to abandon fixed rates entirely.
The Asian financial crisis of 1997 and Argentina's 2001 collapse are textbook examples.
The peso devaluation sparked a full-blown currency crisis.
- external debtObligations to overseas creditors
- fiscal deficitSpending exceeds revenue
- trade imbalanceUnequal imports versus exports
- capital flightRapid outflow of investments
- emerging marketsRapidly growing economies
contagion effect · bank run · fiscal austerity · political instability · devaluation · risk aversion · arbitrage · geopolitical tensions · hot money · exchange rate
currency criseseconomic boom
Sustained period of growth
economic prosperity · financial stability · investor confidence · economic expansion · bull markets
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