The 1997–1998 collapse that began with Thailand’s baht crisis was the Asian financial crisis.
Thailand abandoned the baht’s fixed exchange-rate system on July 2, 1997, after heavy pressure on its foreign-exchange reserves. The currency then depreciated sharply, and financial stress spread to Indonesia, South Korea, Malaysia, and other economies.
Many affected countries had accumulated large foreign-currency debts, especially debts owed by companies and banks. When local currencies weakened, those obligations became much more expensive to repay. Property and stock markets also fell, while lenders withdrew capital.
The International Monetary Fund organized major rescue programs for Thailand, Indonesia, and South Korea. Hong Kong defended its currency peg, while Japan and China played important regional roles. The crisis is sometimes called the Asian currency crisis, but its effects reached banking systems, companies, employment, and political institutions as well as exchange rates.