Thailand devalued the baht on July 2, 1997, triggering the Asian financial crisis and a wave of stock-market crashes.
For years, Thailand had maintained a close link between the baht and the U.S. dollar. Speculative pressure grew as Thailand’s property and financial sectors weakened, foreign debts increased, and investors questioned whether the central bank could defend the currency’s value.
On July 2, Thailand abandoned its fixed exchange-rate policy and allowed the baht to float. The currency rapidly lost value, making dollar-denominated debts more expensive for Thai companies and banks. Financial stress then spread to Indonesia, South Korea, Malaysia, and other markets.
The date is sometimes confused with later turning points, including Indonesia’s 1998 crisis or the Russian default of August 1998. Thailand’s baht decision came first and is widely treated as the starting point of the 1997 Asian financial crisis.