During the 1997 Asian financial crisis, Thailand’s baht was forced to float on July 2, 1997.
Thailand had maintained a managed exchange rate, effectively linking the baht to a basket dominated by the U.S. dollar. Speculative pressure and declining foreign-exchange reserves made that policy increasingly difficult to defend.
After the baht was allowed to float, it depreciated sharply. Financial stress spread to Indonesia, South Korea, Malaysia, and other economies, where companies and banks often had large foreign-currency debts. The crisis then became a major international financial event.
The crisis is commonly called the Asian financial crisis, but it did not begin with every Asian currency at once. The Thai baht’s devaluation is widely identified as the starting point, while the later collapse of the Indonesian rupiah and South Korean won deepened the turmoil.