The Asian Financial Crisis and the IMF
Summary of Presentation by Kunio Saito
Director, IMF Regional Office for Asia and the Pacific
March 24, 1998

Key Features of the Present Crisis

The present crisis may be attributed to a combination of factors - excessive investment financed by excessive short term borrowing, economic overheating, delays in policy adjustments to these and other structural issues (including a prolonged dollar peg). It is characterized by:
(1) sudden loss of confidence in the exchange markets and in the banking system,
(2) unprecedently large pressures on markets and
(3) rapid and extensive contagion, involving, expecially, Thailand, Indonesia, and Korea.

IMF's New Approach

To meet these new challenges, the IMF has used new approaches;
(1) mobilizing unprecedently large financing packages (Table 1), and processing them within a short period (2-3 weeks), and
(2) supporting the countrie's economic stabilization/reform programs, which combine sound macroeconomic management with financial sector restructuring, strengthening of corporate governance and other reform measures.

Table 1
	Date Approved	Amount of Package	IMF  (Already Disbursed)
Thailand	Aug.23, 1997	$17 bln	$4 bln  ($2.3bln)
Indonesia	Nov.4, 1997	$40 bln	$10 bln  ($3.0 bln)
Korea	Dec.4, 1997	$57 bln	$21 bln  ($15 bln)