Which 1997 crash began when Thailand’s government abandoned the baht’s fixed exchange-rate policy?

The Asian financial crisis began in Thailand when the government abandoned the baht’s fixed exchange-rate policy in July 1997.

Thailand had maintained a close link between the baht and the U.S. dollar, but heavy borrowing, property speculation, and pressure from currency traders made the arrangement difficult to defend. On July 2, 1997, the baht was allowed to float and rapidly lost value.

Financial stress spread across East and Southeast Asia. Indonesia, South Korea, and other economies experienced currency devaluations, falling asset prices, corporate failures, and banking problems. The International Monetary Fund arranged assistance programs for several affected countries.

The crisis was not simply a stock-market event: foreign-exchange and banking problems were central. Nevertheless, collapsing share prices and capital flight made it one of the major international financial crises of the late twentieth century.