In July of 1997, when the Bank of Thailand was forced to devalue the baht, few analysts anticipated that the move would lead to contagion affecting other countries in south-east Asia and that it would eventually spread to Korea and Taiwan.

Within six weeks of the baht's devaluation, the Indonesian rupiah was in freefall, going from 2,300 to the dollar to well over 10,000. The computer systems of some Japanese banks crashed as they were not programmed to handle a move from four digits to five.

For years, Bank Indonesia had let its currency lose value very gradually and predictably against the dollar. Precisely because the central bank's exchange rate policy was so predictable, Indonesian companies happily borrowed dollars rather than their own currency since dollar interest rates were much lower.