Thailand devalued the baht on July 2, 1997, triggering the 1997 Asian financial crisis.
Thailand had maintained a managed exchange rate that linked the baht closely to the US dollar. After heavy pressure from speculators and a sharp loss of foreign-exchange reserves, the government abandoned the peg and allowed the currency to float.
The crisis spread through economies with large foreign-currency debts, weak financial institutions, property bubbles, and fragile exchange-rate arrangements. Indonesia, South Korea, Malaysia, and the Philippines were among the countries severely affected, while stock markets and currencies fell across the region.
The International Monetary Fund organized major assistance programs, especially for Thailand, Indonesia, and South Korea. The crisis was not simply a stock-market event: currency collapses, banking problems, corporate debt, and capital flight reinforced one another.