The Thai baht was the first major Asian currency devalued at the start of the 1997 Asian financial crisis.
On 2 July 1997, Thailand abandoned its exchange-rate peg to the U.S. dollar and allowed the baht to float. The currency then fell sharply. Investors and lenders reassessed other Asian economies, and financial pressure spread through countries with large foreign-currency debts, property bubbles, weak banks, or fixed exchange rates.
The crisis affected Thailand, Indonesia, South Korea, Malaysia, and other economies. International rescue programs, including a large International Monetary Fund package for Thailand, were combined with domestic austerity and financial restructuring. The downturn caused severe recessions and political upheaval in several countries.
The baht is sometimes described as merely the first currency to fall, but the crisis had broader causes and no single explanation. The neighboring Indonesian rupiah and South Korean won later experienced especially severe pressure.