In the 1997 Asian financial crisis, Thailand devalued the baht and triggered regional market turmoil.
Thailand abandoned its fixed exchange-rate system on July 2, 1997, allowing the baht to float after intense pressure on the currency. The move followed months of speculative attacks and declining confidence in Thailand’s financial position. The baht then lost substantial value.
The crisis spread through financial markets and currencies in Indonesia, South Korea, Malaysia, and other economies. Thailand’s devaluation was the opening event of the regional crisis, but it was not the only cause of the turmoil. Heavy foreign borrowing, weak financial institutions, property speculation, and fragile exchange-rate arrangements all contributed to the severity of the downturn.