Currency values, for example, fell as much in countries that raised interest rates sharply — Thailand and Korea — as in countries where interest rates were raised by less, such as Malaysia. These trends, of course, mostly reflect the endogeneity of both the exchange rate and interest rates to swings in investor confidence.
Countries where investor sentiment declined most strongly both experienced sharper falls in currency values and were required to raise interest rates higher to prevent even sharper depreciation. This suggests that, during the months following devaluation, exchange rates were driven as much by broad concerns about creditworthiness as by concerns about interest rate differentials.