Beginning with the floating of the Thai baht on 2 July 1997, a regional crisis unfolded that saw the magic disappear from the economies of East Asia. What appeared initially to be merely the sharp devaluation of a single currency turned into an economic free-fall that rippled across neighbouring economies and eventually the entire region. By early September 1997, the Malaysian ringgit had fallen to its lowest level against the US dollar since 1971; in the space of six months the Thai stock-market had lost 38 per cent of its value; Malaysia’s lost 44 per cent, the Philippines’ lost 35 per cent; Indonesia’s lost 17 per cent; and Japan’s lost 4 per cent. By year’s end, the Indonesian and South Korean economies had been brought to their knees, and speculation had begun that East Asia would drag the global economy into a bout of chronic deflation.