It has been a long and hard road, but by the end of this year the first of emerging Asia's currencies is likely to regain its level on the eve of the regional economic crisis in June 1997. Over time others will follow, erasing memories of the most painful and humiliating episode in Asia's recent economic history. Last week, the Monetary Authority of Singapore announced it would increase the rate at which it steers the trade-weighted appreciation of the Singapore dollar. As reasons for the move, it cited 'inflationary pressures stemming from external sources, as well as domestic conditions including a tight labour market and rising rental costs'. Analysts estimate that the MAS will aim to appreciate the Singapore dollar at an annual rate of 3 per cent against its reference basket of currencies, up from a 2 per cent rate previously. That might not seem like a huge difference. But the Singapore dollar is trading at an exchange rate of S$1.47 to the US dollar. With Friday's Group of Seven finance ministers' meeting unlikely to formulate any plan to support the weakening US currency, the greenback is expected to slide further over the coming weeks. That means, by the end of this year, the Singapore dollar could easily climb to S$1.43 to the US dollar, the exchange rate at which it was quoted on July 1, 1997, immediately before the devaluation of the Thai baht kicked off the Asian economic crisis. It has been quite a ride. At one point, amid the risk aversion that followed the terrorist attacks of September 11, 2001, the Singapore currency dropped almost to S$1.86 to the US dollar, a fall of 23 per cent from mid-1997. Of course, other Asian currencies dropped far more but some of those are also close to regaining their pre-crisis exchange rate against the US dollar. Few fell more abruptly than the Korean won. From 885 won to the dollar in late June 1997, the currency plummeted to 1,962 before the end of the year, a drop of 55 per cent. Today, however, the won has climbed back to 917 to the dollar, just 3.5 per cent below its level at the start of the regional crisis. It is likely the won would have appreciated even more against the US currency without central bank intervention to stop it rising too much relative to the Japanese yen. However, with the local economy buoyant and trade and capital inflows strong, the currency looks set to rise further in the medium term. Analysts at Morgan Stanley expect the won to hit 880 won to the dollar by the end of next year, surpassing its level at the start of the 1997 crisis. Other regional currencies are widely expected to climb, too, over the next 12 months, including the Malaysian ringgit and the Philippine peso. Indeed, the peso rose an impressive 6.7 per cent over the month to last Thursday, lifted in part by remittances from expatriate workers. Yet, despite the positive regional economic outlook, strong export growth driven in part by demand from China and heavy inflows of portfolio capital, not all the crisis-hit currencies will come close to regaining the ground lost since 1997. The Thai baht and Taiwan dollar remain vulnerable to political tensions. And with the rupiah quoted at 9,060 to the US dollar, down 73 per cent from June 30, 1997, it is hard to believe the Indonesian currency will ever make it back to its pre-crisis level of 2,432 to the dollar.