The Thai baht was the main currency at the center of the 1997 Asian financial crisis.
Thailand abandoned its fixed exchange-rate policy for the baht on July 2, 1997, allowing the currency to float and sharply depreciate. The decision followed pressure from declining foreign-exchange reserves, heavy external borrowing, and doubts about Thailand’s ability to defend the peg.
The turmoil spread across East and Southeast Asia. Indonesia, South Korea, Malaysia, and the Philippines experienced currency pressure, falling stock markets, banking problems, or recession. International investors withdrew capital, while companies and banks that had borrowed in foreign currencies faced much higher debt burdens after local currencies weakened.
The crisis was not caused by one identical weakness in every country. Common vulnerabilities included short-term foreign borrowing, property and equity speculation, fragile financial institutions, and exchange-rate arrangements that encouraged confidence until sentiment suddenly reversed. The International Monetary Fund provided major assistance packages, especially to Thailand, Indonesia, and South Korea.