During the 1997 Asian financial crisis, Thailand devalued its currency, the baht, on July 2, 1997.
Thailand had maintained a managed exchange rate in which the baht was closely linked to the US dollar. Speculative pressure, falling foreign-exchange reserves, and large short-term debts made that arrangement increasingly difficult to defend.
After the baht was allowed to float, it lost substantial value. Financial stress spread across Asia, affecting Indonesia, South Korea, Malaysia, the Philippines, and other economies. Stock markets fell, companies struggled with dollar-denominated debt, and several countries sought international assistance.
The crisis is often reduced to a currency event, but its stock-market effects were closely tied to banking weaknesses, property bubbles, foreign borrowing, and rapid capital outflows. Thailand’s devaluation is generally treated as the crisis’s starting point.