This article examines the political economy of the Malaysian crisis of 1997-98. Malaysia did not turn to the IMF for assistance when pressure from the 1997-98 East Asian financial crises hit the country. The country was less vulnerable than its neighbours not least because it had earlier imposed limits on foreign borrowing and prudential regulations and supervision of the banking sector. Although Malaysia’s pathway through the 1997-8 crisis included an orthodox adjustment program of the type the IMF would have required, this program was soon reversed in favour of reflationary monetary policies and the imposition of a short-term capital control regime. These responses took place against a backdrop of political intrigue and drama, however, they reflected an underlying pragmatism and recent history of using capital controls and of not turning to the IMF.