What regional crisis began with Thailand’s baht devaluation in July 1997?

Thailand’s baht devaluation in July 1997 began the Asian financial crisis.

Thailand abandoned its fixed exchange-rate system on July 2, 1997, allowing the baht to float and sharply reducing its value. Investors then questioned other Asian currencies and economies, causing capital flight and market collapses across the region.

The crisis spread to Indonesia, South Korea, Malaysia, and other economies. Heavy foreign-currency borrowing, weak financial regulation, property speculation, and reliance on short-term capital made several countries especially vulnerable.

The International Monetary Fund arranged major rescue programs, including packages for Thailand, Indonesia, and South Korea. Hong Kong’s currency peg survived, although its stock market and economy still experienced intense pressure.