The Thai baht was devalued after Thailand abandoned its fixed exchange rate on July 2, 1997, helping trigger the Asian financial crisis.
Thailand had maintained the baht’s value against a basket dominated by the US dollar. Mounting pressure from debt, property-market weakness, and speculative attacks made that arrangement increasingly difficult to defend. After the peg was abandoned, the baht lost substantial value.
Financial stress then spread across East and Southeast Asia. Indonesia’s rupiah, Malaysia’s ringgit, and South Korea’s won also came under intense pressure. Stock markets fell, companies struggled with foreign-currency debts, and several governments sought international assistance.
The baht is sometimes incorrectly described as the currency that collapsed throughout Asia. It was the crisis’s initial flashpoint, not the only affected currency. The International Monetary Fund later arranged a major assistance program for Thailand and participated in support packages elsewhere.