Thailand abandoned its baht peg on July 2, 1997, helping begin the 1997 Asian financial crisis.
Before the decision, the baht was maintained within a narrow relationship to the U.S. dollar. Thailand had accumulated substantial foreign-currency debt, and investors increasingly doubted whether the peg could survive pressure from speculative attacks and declining confidence.
On July 2, Thai authorities allowed the baht to float and it quickly lost value. The devaluation made dollar-denominated debts more expensive in baht terms, worsening problems for companies and financial institutions. Contagion spread to other Asian economies, including Indonesia and South Korea.
The crisis was regional rather than limited to Thailand. Currency collapses, falling stock markets, corporate failures, and emergency international lending affected several economies. The International Monetary Fund arranged major support programs, although the terms and consequences of those programs remain debated by economists and historians.