The Thai baht was forced to float after Thailand abandoned its exchange-rate peg on July 2, 1997.
Thailand had maintained the baht within a managed exchange-rate system linked largely to the U.S. dollar. Heavy borrowing, property speculation, current-account pressures, and attacks by currency traders made the arrangement increasingly difficult to defend. After the central bank spent reserves supporting the currency, Thailand allowed the baht to float.
The baht’s devaluation became the starting point of the Asian financial crisis. Financial pressure spread to Indonesia, South Korea, Malaysia, and other economies. Exchange rates fell, stock markets plunged, companies struggled with foreign-currency debt, and several countries sought assistance from the International Monetary Fund.
The crisis was regional rather than a single synchronized global stock-market crash. It also differed from the 1998 Russian crisis, in which Russia announced a default and ruble devaluation. The baht’s July 1997 move is the specific currency event that marked the crisis’s opening.