The Asian financial crisis caused major stock-market collapses across Thailand, Indonesia, South Korea, and neighboring economies in 1997 and 1998.
The crisis began in Thailand after pressure on the baht forced the government to abandon its currency peg to the U.S. dollar on July 2, 1997. Investors then reassessed economies across East and Southeast Asia, selling currencies, shares, and other assets.
Many affected countries had accumulated substantial foreign-currency debt, while banks and companies were exposed to property and investment bubbles. Currency devaluations increased the domestic burden of dollar-denominated borrowing, worsening corporate and banking distress.
The International Monetary Fund arranged assistance programs for Thailand, Indonesia, and South Korea. The crisis was regional rather than a single exchange failure, and Japan’s already weak economy was affected even though Japan was not one of the principal IMF bailout recipients.