Thailand devalued its currency on July 2, 1997, triggering the first major shock of the Asian financial crisis.
Thailand had maintained the baht’s value against a basket dominated by the U.S. dollar. After heavy borrowing, property speculation, and pressure from currency traders, the country abandoned that arrangement and allowed the baht to float. Its value dropped sharply.
The turmoil spread through economies that had similar vulnerabilities, including large foreign-currency debts, weak banking systems, and property-market bubbles. Indonesia, South Korea, Malaysia, and other countries experienced currency collapses, falling stock prices, recessions, or emergency international assistance.
The crisis was not simply a stock-market event: currencies, banks, companies, and governments were all affected. The International Monetary Fund arranged rescue programs for several countries, while the episode prompted later debate about capital controls, exchange-rate regimes, and financial regulation.