The financial crisis which began in July 1997 struck multiple currency markets o
ID: 2637388 • Letter: T
Question
The financial crisis which began in July 1997 struck multiple currency markets of East Asia.
a. For each of the following currencies, calculate the percent change in value (against the dollar) during the period from July to November.
b. Did the Korean won appreciate or depreciate against the Indonesian rupiah during this period?
Country
Currency
Exchange rate on July 1997
(per US$)
Exchange Rate on November 1997 (per US$)
China
Yuan
8.40
8.40
Hong Kong
Dollar
7.75
7.70
Indonesia
Rupiah
2400
3600
Korea
Won
900
1100
Malaysia
Ringgit
2.50
3.50
Phillippines
Peso
27
34
THailand
baht
25.0
40.0
Country
Currency
Exchange rate on July 1997
(per US$)
Exchange Rate on November 1997 (per US$)
China
Yuan
8.40
8.40
Hong Kong
Dollar
7.75
7.70
Indonesia
Rupiah
2400
3600
Korea
Won
900
1100
Malaysia
Ringgit
2.50
3.50
Phillippines
Peso
27
34
THailand
baht
25.0
40.0
Explanation / Answer
Country Currency Exchange rate on July 1997 Exchange Rate on November 1997 (per US$)(B) % age Change=(B-A)/A*100 (A) (per US$) China Yuan 8.4 8.4 0 Hong Kong Dollar 7.75 7.7 -0.65 Indonesia Rupiah 2400 3600 50 Korea Won 900 1100 22.22 Malaysia Ringgit 2.5 3.5 40 Phillippines Peso 27 34 25.93 THailand baht 25 40 60 Exchange Ratio of Korea/Indonesia 2.667 3.273 So, one will get more of Indonesian Rupiah for one unit of Korean Won.So Indonesian Rupiah deppreciated.
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