Thailand first devalued its currency during the 1997 Asian financial crisis.
On July 2, 1997, Thailand abandoned its fixed exchange-rate system and allowed the baht to float after exhausting foreign-exchange reserves defending its peg to the U.S. dollar. The baht then fell sharply, helping ignite a regional financial crisis.
The shock spread through Southeast Asia and later reached South Korea. Investors withdrew capital, currencies weakened, stock markets plunged, and heavily indebted companies and banks came under severe pressure. The International Monetary Fund arranged assistance programs for several affected economies.
Indonesia, Malaysia, and South Korea were major victims of the crisis, but Thailand was the starting point of the currency turmoil. The episode was not simply a stock-market crash: currency devaluations, banking problems, and foreign debt were central parts of it.