Which 1997 crisis spread through East and Southeast Asia after Thailand devalued its baht?

The crisis that spread through East and Southeast Asia after Thailand devalued its baht was the Asian financial crisis.

Thailand abandoned the baht's exchange-rate defense on July 2, 1997, after intense pressure on its foreign-exchange reserves. The devaluation exposed weaknesses that existed across several economies, including heavy foreign-currency borrowing, short-term external debt, weak financial supervision, and property-market bubbles.

The turmoil spread to Indonesia, South Korea, Malaysia, and other economies through capital flight and falling currencies and stock markets. International Monetary Fund programs provided assistance to several affected countries, although the conditions attached to those programs remain debated. Hong Kong defended its currency peg, while Japan and other regional economies also experienced serious stress.

The crisis is sometimes described as purely a currency crisis, but it also involved banking failures, corporate debt, recessions, and collapsing asset prices. Recovery varied by country. The episode led many Asian governments to build larger foreign-exchange reserves and strengthen financial regulation.