Which of the following contributed to the Asian Crisis?
A. Borrowers in the Asian countries scrambled to sell local currency to establish hedges against exchange-rate risks.
B. The strong capital inflows from the industrialized countries mainly provided financing for large fiscal deficits in the Southeast Asian countries.
C. The Hong Kong dollar was allowed to depreciate.
D. The currencies of most of the Asian countries were substantially undervalued.
Answer: A
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