| The intent of this paper is to gain a deeper understanding of the currency crises that have evolved and economically afflicted many nations in the last couple of decades. This paper examines the determinants of currency crises and financial assistance provided by the International Monetary Fund (and other organizations), with an annual panel data set of 15 countries between 1975 and 1997. I estimate a logit model and find that high rates of real exchange rate misalignment, current account imbalances, low foreign exchange reserves, and poor economic growth performance all have significant power to explain the presence of currency crises and subsequent financial assistance in my sample, My results also support the notion that financial assistance did not lead the path of speculative attack on a country's currency, thereby refuting what some critics claim that the ME is somehow is detrimental to the prosperity of a country's welfare through its economic remedy programs. |
