The effects of the collapse of the Asian currencies in 1997 spilled over to the world economy in 1998; the crisis spread to Russia and other East European countries and to Latin America. The crisis in Asia followed the sharp decline in domestic demand in Japan.
The sudden change in expectations generated rapid capital outflows and currency depreciations that exceeded some 50% in Korea and Thailand and 40% in Malaysia and the Philippines. In 1998 the Korean and Thai currencies recouped half the value they had lost. The Indonesian rupiah lost half its value in 1997 and another 20% of its initial value in 1998.