Which 1997 crisis began when Thailand abandoned its baht peg to the U.S. dollar?

The 1997 crisis that began when Thailand abandoned its baht peg to the U.S. dollar was the Asian financial crisis.

Thailand floated the baht on July 2, 1997, after authorities struggled to defend the currency against speculative pressure. The devaluation exposed weaknesses that had accumulated during years of rapid capital inflows, including high foreign-currency debt, property speculation, and fragile banking systems.

Financial stress spread to Indonesia, South Korea, Malaysia, and other economies. Stock markets and currencies fell, businesses faced difficulty repaying dollar-denominated loans, and international rescue packages were assembled. The International Monetary Fund supported programs for several affected countries, including Thailand, Indonesia, and South Korea.

The crisis was regional but had global consequences for investors and trade. It is distinct from the 1994–95 Mexican peso crisis and from Russia’s 1998 default. Thailand’s currency was the baht, but the event’s standard name refers to the wider Asian financial crisis.