July 2, 1997, was the day Thailand devalued the baht, marking the start of the 1997 Asian financial crisis.
Thailand had maintained the baht’s value against a basket of currencies, effectively tying it closely to the U.S. dollar. Heavy borrowing, property speculation, weak financial institutions, and pressure from currency traders made that arrangement increasingly difficult to defend.
On July 2, Thailand allowed the baht to float. Its value fell sharply, and investor confidence weakened across the region. Financial stress spread to Indonesia, South Korea, Malaysia, and other Asian economies through currency, banking, and stock-market channels.
The crisis was not simply a stock-market event: exchange-rate collapses, corporate debt, bank failures, and international lending all played important roles. The International Monetary Fund arranged assistance programs for several affected countries, while Thailand’s devaluation became the defining opening event.