The underlying cause of the crisis, however, appears to be the significant deterioration in the current account and the delays in the privatisation programme which were causing interest rates to rise from September, and more markedly from around mid-November 2000. The severe liquidity squeeze and growing bank distress was accompanied by pressure on overnight interest rates and government bond yields.
The capital outflow was only halted, and devaluation fears allayed when the IMF announced in December 2000 an additional $ 7 billion to alleviate the balance of payment difficulties stemming from the recent crisis. Interest rates declined and there was a modest rise in capital flows in January 2001.