Thailand devalued the baht on 2 July 1997, helping trigger the Asian financial crisis.
Before the devaluation, Thailand maintained a fixed or tightly managed exchange rate that linked the baht mainly to the US dollar. Speculators attacked the currency after concerns grew about Thailand’s current-account deficit, weak financial institutions, and large foreign-currency debts. The central bank eventually allowed the baht to float.
The baht’s fall quickly spread financial pressure across East and Southeast Asia. Indonesia, South Korea, Malaysia, and the Philippines all experienced severe currency or banking stress, although each country had different vulnerabilities and policy responses.
The crisis was not simply an inflation episode. It involved exchange-rate collapses, banking failures, capital flight, recession, and emergency international lending. The International Monetary Fund arranged a major assistance package for Thailand later in 1997.