Which 1997 crisis caused South Korea’s stock exchange to lose more than half its value?

The Asian financial crisis caused South Korea’s stock exchange to lose more than half its value in 1997.

South Korea was one of the economies hit hardest by the Asian financial crisis. Foreign lenders withdrew funds, Korean companies and financial institutions faced heavy foreign-currency debts, and the country’s stock market fell by more than half from its 1997 peak to its 1998 low.

The crisis began in Thailand in July 1997 after pressure on the baht forced a devaluation. Contagion then spread across Southeast and East Asia, affecting Indonesia, Malaysia, South Korea, and other markets. The International Monetary Fund arranged a major support program for South Korea in December 1997.

The crisis did not affect every market in exactly the same way, and the stock-market losses were accompanied by currency collapses, bankruptcies, and recessions. South Korea later recovered strongly, aided by reforms, exports, and restructuring.