currency crisis
National tender plummets
A currency crisis occurs when a nation's currency loses value rapidly, often triggering capital flight as investors abandon the currency.
Central banks may exhaust reserves defending the exchange rate, sometimes leading to devaluation or default.
Currency crises can spread contagiously across economies: The 1997 Asian currency crisis began in Thailand and swept through the region.
Sudden widespread selling frenzy
- capital flightRapid outflow of investments
- sell-offRapid mass divestiture
- investor confidenceFaith in financial prospects
- volatilityRapid, unpredictable changeability
systemic risk · spillover · emerging markets · domino effect · safe haven · risk aversion · hot money · credit squeeze
Asset value reduction over time
- exchange rateCurrency conversion value
- plummetRapid downward descent
- forexCurrency trading market
- pegWooden pin for fastening
float · convertibility · slide · erosion · weaken · revaluation · stabilize · intervention
Extreme rapid price escalation
- stagflationStagnant growth meets inflation
- purchasing powerEconomic spending ability
- money supplyTotal currency in circulation
- dollarizationAdopting foreign currency officially
consumer prices · CPI · price controls · indexation · cost-push · inflationary · quantitative easing
market panic
Sudden widespread selling frenzy
- capital flightRapid outflow of investments
- sell-offRapid mass divestiture
- investor confidenceFaith in financial prospects
volatility · systemic risk · spillover · emerging markets · domino effect · safe haven · risk aversion · hot money · credit squeeze · bailout
depreciation
Asset value reduction over time
- exchange rateCurrency conversion value
- plummetRapid downward descent
- forexCurrency trading market
peg · float · convertibility · slide · erosion · weaken · revaluation · stabilize · intervention · adjustment
hyperinflation
Extreme rapid price escalation
- stagflationStagnant growth meets inflation
- purchasing powerEconomic spending ability
- money supplyTotal currency in circulation
dollarization · consumer prices · CPI · price controls · indexation · cost-push · inflationary · quantitative easing
- economyGDP, money, inflation, inflation rate, GNP
- crisesemergency, disaster, natural disaster, catastrophe, calamity
- economic crisisrecession, depression, collapse, downturn, contraction
- modern economicsGDP, GDP growth, recession, inflation, interest rates
- Confederation EraArticles of Confederation, Constitutional Convention, Continental Congress, state sovereignty, interstate commerce
- currency historygold standard, silver standard, bimetallism, fiat money, paper money
currency crisiseconomic boom
Sustained period of growth
economic prosperity · bull market · economic miracle · economic expansion · financial stability
currency, crisis, currencies, crises, current, currently, concurrent, concurrence, recurrent