The 1997 crisis that triggered major stock-market falls across Thailand, Indonesia, South Korea, and other Asian economies was the Asian financial crisis.
The crisis began with pressure on Thailand’s baht and intensified after Thailand allowed the currency to float on July 2, 1997. Investors then reassessed other economies with heavy foreign-currency borrowing, fixed or managed exchange rates, and vulnerable banking systems.
Currency devaluations and capital flight spread through Southeast and East Asia. Stock markets fell, companies struggled to repay dollar-denominated debts, and several countries required international assistance. Indonesia, South Korea, and Thailand were among the economies most severely affected, while Hong Kong’s market also experienced intense pressure.
The crisis was not simply a stock-market event. Exchange-rate policy, short-term foreign debt, weak financial regulation, and sudden reversals of investment all mattered. The International Monetary Fund arranged major support programs for Thailand, Indonesia, and South Korea, though the conditions attached to those programs remained controversial.