Which 1997 crisis began with Thailand abandoning its fixed exchange-rate policy and spread across Asian markets?

The 1997 crisis that began with Thailand abandoning its fixed exchange-rate policy and spread across Asian markets was the Asian financial crisis.

Thailand’s baht had been effectively linked to the U.S. dollar, while Thai banks and companies accumulated large foreign-currency debts. Speculators attacked the baht after reserves came under pressure, and Thailand allowed the currency to float on July 2, 1997. Its value then fell sharply.

Investors reassessed risks across the region, leading to falling currencies, stock markets, and property prices in Indonesia, South Korea, Malaysia, and other economies. The crisis exposed weaknesses including short-term foreign borrowing, fragile financial institutions, and limited transparency.

The International Monetary Fund arranged assistance programs for several affected countries, although the conditions attached to those programs remain debated. The crisis was centered in East and Southeast Asia, not solely in stock exchanges; currency and banking failures were equally important parts of the episode.