During the 1997 Asian financial crisis, Thailand devalued the Thai baht on 2 July 1997.
Thailand had maintained a managed exchange rate in which the baht was closely linked to the U.S. dollar. Heavy borrowing, property speculation, weak financial institutions, and pressure from currency traders made that arrangement increasingly difficult to defend. After the Bank of Thailand spent large foreign-exchange reserves supporting the currency, the government allowed the baht to float.
The devaluation sharply reduced the baht's value and helped turn Thailand's financial problems into a regional crisis. Stress spread to Indonesia, South Korea, Malaysia, and other economies through currency markets, banks, and stock exchanges. The International Monetary Fund later organized assistance programs for several affected countries.
The crisis is sometimes called the Asian financial crisis or the Asian currency crisis. It was not caused by one single stock-market event; currency pressure, debt, banking weaknesses, and falling asset prices reinforced one another.