Exchange Rate Policies in a Small Open Emerging Economy
: Lessons from the East Asian Currency Crisis

I. Introduction 2

II. Exchange Rate Policies and Currency Crisis in East Asia 5

  1.  Capital Inflows, Appreciation and Current Account Deficits 5 
  2. Accumulation of External Debts, Reversal of Capital Inflows and Currency Crisis 9

III. Changes in Exchange Rate Policies after the Currency Crisis in East Asia 12

IV. Effects of Changes in Exchange Rate Policies in East Asia 14

  1. Changes in Volatilities of Exchange Rates before and after the Crisis 14
  2. Movements of Exchange Rates before and after the Crisis 17
  3. Changes in Influences of Dollar and Yen on East Asian Currencies
    before and after the Crisis 19
  4. Consequences of Exchange Rate Policies 21

V.  Lessons from East Asian Experiences for Exchange Rate Policies 24