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Why do policymakers respond differently to speculative exchange market pressure on their cur-rencies? When deciding about defending or depreciating their currencies against such pressure, policymakers consider private sector vulnerabilities to a depreciation and monetary tightening. These vulnerabilities differ between periods of mild and severe pressure. Faced with mild pres-sure, interest groups evaluate the effects of the two policy options based only on their vulnerabil-ity to depreciation. Only when pressure intensifies, they increasingly take the trade-off between their depreciation vulnerability and their vulnerability to interest-rate increases into account. High interest-rate vulnerabilities can result in a re-assessment of the preferred policy response, leading groups that initially preferred a defense to prefer a depreciation when the pressure intensifies. Comparative case studies of speculative attacks on the currencies of Hong Kong, Korea, Thailand and Taiwan support the argument's empirical implications. The case studies show that policy-makers strongly defended their currencies against mild pressure when the private sector's vulner-ability to depreciation was high. In countries, where interest group vulnerabilities to interest-rate increases exceeded the potential costs of a depreciation, these defenses were subsequently aban-doned when pressure intensified. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]