Which 1997 crash followed Thailand’s baht devaluation and spread across Asian markets?

The Asian financial crisis was the regional market collapse that followed Thailand’s baht devaluation in 1997.

Thailand abandoned its fixed exchange-rate policy on July 2, 1997, allowing the baht to float after intense pressure on its foreign-exchange reserves. The currency then lost substantial value. Investor confidence weakened across the region, and capital fled several economies that had previously attracted large foreign inflows.

Indonesia, South Korea, and Malaysia were among the countries hit especially hard. Stock markets fell, currencies depreciated, companies struggled with foreign-currency debt, and financial institutions faced severe stress. The International Monetary Fund arranged major assistance programs, including a large package for South Korea.

The crisis was not identical in every country, and Hong Kong’s currency system survived intense pressure. A common mistake is to describe it simply as a stock-market crash: it was a combined currency, banking, debt, and economic crisis.