Which 1997 crisis began with Thailand’s decision to float the baht and spread across Asia?

The 1997 crisis that began with Thailand’s decision to float the baht and spread across Asia was the Asian financial crisis.

Thailand abandoned its fixed exchange-rate arrangement on July 2, 1997, after heavy pressure on its foreign-exchange reserves. The baht fell sharply, and investors began reassessing economies across the region that had accumulated foreign-currency debt, depended on capital inflows, or had vulnerable banking systems.

Financial stress spread to Indonesia, South Korea, Malaysia, and other markets. Stock prices and currencies fell, companies struggled with dollar-denominated liabilities, and several governments sought assistance from the International Monetary Fund. The crisis also contributed to political upheaval, particularly in Indonesia.

The term “Asian financial crisis” covers a regional chain of events, not a single stock-exchange trading day. It is distinct from the Mexican peso crisis of 1994 and the Russian financial crisis of 1998, although international investors connected these episodes through concerns about emerging-market risk.