The first major currency devaluation of the 1997 Asian financial crisis was Thailand’s devaluation of the Thai baht.
On 2 July 1997, Thailand abandoned the baht’s long-standing peg to the U.S. dollar and allowed the currency to float. The baht then lost substantial value, and pressure spread through financial markets across East and Southeast Asia.
Many economies in the region had experienced rapid credit growth, large foreign-currency debts, property speculation, and substantial capital inflows. When confidence weakened, investors withdrew funds and companies found it harder to repay dollar-denominated obligations with depreciating local currencies.
The crisis affected Thailand, Indonesia, South Korea, Malaysia, and other economies, though the effects differed by country. It was not simply a stock-market crash: currency collapses, banking distress, recession, and international emergency lending were all central parts of the episode.