| Abstract: | ![]()
During the Asian financial crisis, the exchange rate of Thai baht against U.S. dollar grew by 17%. The rate of Korean won against U.S. dollar skyrocketed to a record high of 1008:1 and that of Indonesian rupi-ah against dollar even crossed the 10000:1 mark. However, after the international financial crisis broke out in 2008, the dol-lar index turned out to rise dramatically. On November 21, 2008, the dollar index reached 88 points, rising by 23.3% over the 71 points on April 22, 2008. Conven-tional wisdom is that a currency should depreciate when the economic fundamen-tals are in a downturn. Then how do we explain the substantial appreciation of the U.S. dollar? |
