The world economy may be facing conditions seen during the 1997 Asian Financial Crisis — aggressive U.S. interest rate hikes and a strengthening U.S. dollar.
But history is unlikely to be repeated, analysts said, though they caution that some economies in the region are particularly vulnerable to currency devaluations reminiscent of the time.
On Wednesday, the U.S. Fed Reserve made another interest rate hike of 75 basis points.
The last time the U.S. pushed up interest rates this aggressively in the 1990s, capital fled from emerging Asia into the United States. The Thai baht and other Asian currencies collapsed, triggering the Asian Financial Crisis and leading to slumps in stock markets.
This time, however, the foundations of emerging Asian markets — which have evolved into more mature economies 25 years on — are healthier and better able to withstand pressures on foreign exchange rates, analysts said.
For instance, because there…
