The Southeast Asian currency crisis is far from over. In fact, even if speculators decided today to focus attention on, say, Eastern Europe, the effects would linger. A common defensive measure among central bankers has been to raise interest rates. But that tactic has costs. Obviously, high rates to discourage speculators also dissuade potential borrowers who want the money for more productive uses.
Devaluation makes imported goods more expensive and is inflationary.
Malaysia is deferring some large construction projects as a way to control spending. But such cuts depress economies. True, weaker currencies tend to make exports cheaper and more competitive, but it does not happen right away. Besides, Thailand, and especially Malaysia, export finished products that contain substantial amounts of imported components. In such cases, the higher costs of the imported components neutralize some of the export benefits from a devalued currency.