Financial markets and private capital flows

The difficulty that financial markets have faced in assessing the regional and global impact of the Asian crisis has been evident during 1998 in volatility of as set prices and in declines in major categories of international financing for most developing regions which have become severer and more widespread since the middle of the year. The agreement that the Republic of Korea reached in February with its creditor banks to reschedule outstanding short-term debt led to a sharp recovery in as set prices and a strengthening of exchange rates across East Asia. A stronger than expected performance of the United States economy and improved prospects for a European recovery, which suggested that the developed economies might escape contamination from the crisis and provide the expanding export markets required for adjustment in East Asia, reinforced the positive impact of the debt restructuring, and by the beginning of April it was widely believed that conditions in the region had stabilised and that recovery was imminent.

Sustainable Development Goals:

Decent Work and Economic Growth