Which 1997 currency crisis spread from Thailand to other Asian economies and caused stock-market crashes?

The Asian financial crisis spread from Thailand to other Asian economies and caused severe stock-market crashes.

Thailand devalued the baht on 2 July 1997 after authorities could no longer maintain its fixed exchange-rate regime. Investors then questioned the sustainability of currencies, corporate debts, and banking systems across the region. Pressure spread to Indonesia, South Korea, Malaysia, and the Philippines, among others.

The crisis involved more than stock prices. Many companies and banks had borrowed heavily in foreign currencies, especially US dollars. When local currencies weakened, the domestic cost of repayment rose sharply. Capital outflows, collapsing asset prices, and emergency international assistance deepened the downturn.

The International Monetary Fund arranged major support programs for Thailand, Indonesia, and South Korea. Hong Kong’s currency peg survived, although its stock market experienced extreme volatility. The crisis also influenced later debates about exchange-rate policy and financial regulation.