It was only much later, when capital inflows became strong, after 1992, that their currencies appreciated in real terms. The currency overvaluation, declining exports, overheated property markets and the fragile banking system had fuelled intense foreign currency speculation, as the market participants felt that the natural course of the currency was to depreciate.
Given the huge short-term borrowings, the fund managers started exiting the economy with the first sign of trouble, leading to a de facto devaluation of the Thai baht. An important point to be noted here is that the currency crises in these countries was managed quite efficiently with the help of reserves which most of these countries had to defend their currencies.