The emerging market economies in East Asia (Japan, China, South Korea, Taiwan, Indonesia, Malaysia, the Philippines, Singapore, and Thailand) have experienced a great deal of financial volatility and macroeconomic instability since mid-1997. Reflecting the improved economic outlook and the recovery of the investors’ confidence, domestic financial markets and asset prices in many crisis-hit economies continued their rebound through mid-July 1999. In a number of countries, interest rates fell near or below pre-crisis levels. The currencies of Indonesia, Korea and Thailand stabilised. While the worst of the emerging market crisis seems to be over, the risk of setbacks cannot be ignored given the vulnerability of key economies in the regional economic system and the widespread need for structural reforms in those crisis-hit countries.