Thailand was the first country to devalue its currency during the 1997 Asian financial crisis.
On July 2, 1997, Thailand abandoned its fixed exchange-rate defense of the baht and allowed the currency to float. The baht then depreciated sharply. Thailand had built up substantial foreign-currency debt, while property and financial speculation had expanded during years of rapid growth. Maintaining the exchange rate became increasingly difficult as investors withdrew funds.
The currency move helped turn local financial stress into a regional crisis. Pressure spread to Indonesia, Malaysia, South Korea, and other Asian economies. Stock markets dropped, companies with dollar-denominated debt faced heavier repayment burdens, and several governments sought assistance from the International Monetary Fund.
The event is sometimes called the Asian stock-market crash, but it was more accurately a combined currency, banking, and debt crisis. Thailand’s devaluation was the opening break in the sequence, while the worst effects varied by country and unfolded over several months.