During the 1997 Asian financial crisis, Thailand's currency was devalued after authorities stopped defending its exchange-rate peg.
On July 2, 1997, Thailand abandoned the baht's fixed exchange-rate regime and allowed the currency to float. The baht then lost substantial value, and financial pressure spread across several Asian economies. Thailand's stock market and banking system were already strained by property speculation, foreign-currency borrowing, and heavy short-term debt.
The crisis moved through Indonesia, South Korea, Malaysia, and other markets. Investors withdrew funds, currencies weakened, and companies with dollar-denominated debts faced sharply higher repayment costs in local currency.
Thailand's baht is sometimes mixed up with Indonesia's rupiah, which also suffered a dramatic collapse. The International Monetary Fund later provided a major assistance program to Thailand, but the crisis had broad social and economic consequences throughout the region.