What event helped trigger the Asian financial crisis when Thailand abandoned its fixed exchange-rate policy in 1997?

Devaluation of the Thai baht helped trigger the Asian financial crisis in 1997.

On July 2, 1997, Thailand abandoned its effort to maintain the baht's fixed exchange rate against the US dollar and allowed the currency to float. The baht then lost substantial value, exposing heavy foreign-currency debts held by Thai companies and financial institutions.

Investor confidence weakened across the region. Capital fled several East and Southeast Asian economies, currencies depreciated, stock markets fell, and banks and corporations faced insolvency. Indonesia, South Korea, and Thailand were among the countries most severely affected.

The crisis was not caused by Thailand alone: rapid credit growth, property speculation, weak financial regulation, and large short-term foreign debts made several economies vulnerable. The International Monetary Fund organized assistance programs, while the crisis also encouraged later Asian reserve accumulation and financial reforms.