What 1997 crisis began in Thailand when the baht was devalued, spreading through Asian markets?

The 1997 crisis that began in Thailand when the baht was devalued was the Asian financial crisis.

Thailand abandoned its fixed exchange-rate policy on July 2, 1997, allowing the baht to float and fall sharply. The country had accumulated large foreign-currency debts, and investors became concerned about property speculation, weak financial institutions, and insufficient foreign-exchange reserves.

Pressure spread to Indonesia, South Korea, Malaysia, and other economies. Falling currencies increased the local-currency cost of dollar debts, while stock markets and property markets also declined. The International Monetary Fund organized major support programs for several affected countries, often tied to financial and economic reforms.

The crisis was not simply a stock-market event: exchange rates, banking systems, corporate borrowing, and investor confidence were tightly connected. Hong Kong’s market also came under severe pressure, although its currency peg survived. The turmoil had important political and social consequences across the region.