What 1997 crisis began with Thailand abandoning its baht peg to the U.S. dollar?

The Asian financial crisis began in 1997 when Thailand abandoned its baht peg to the U.S. dollar.

Thailand was under intense pressure from falling foreign-exchange reserves, heavy borrowing, and speculative attacks. On July 2, 1997, the country allowed the baht to float after defending its dollar-linked exchange rate became unsustainable. The currency then lost substantial value, and financial stress spread across the region.

Indonesia, South Korea, and other Asian economies experienced currency collapses, banking failures, recessions, and stock-market declines. International investors withdrew funds, while companies and banks that had borrowed in U.S. dollars faced sharply higher repayment costs in local currency. The International Monetary Fund arranged major assistance programs, including packages for Thailand, Indonesia, and South Korea. The crisis is often called the Asian financial crisis rather than simply a stock-market crash because exchange rates, banks, corporate debt, and sovereign policy were central to the chain of events.