Which 1997 currency devaluation helped trigger the Asian financial crisis and major stock-market falls?

The Thai baht devaluation helped trigger the Asian financial crisis and major stock-market falls in 1997.

Thailand abandoned its baht peg to the U.S. dollar on July 2, 1997, allowing the currency to float. The baht then lost substantial value, exposing heavy foreign-currency borrowing and weaknesses in Thailand’s financial system.

Investor fear spread across countries with similar vulnerabilities. Indonesia, South Korea, and Malaysia experienced severe currency pressure, while stock markets and property markets fell sharply. Many companies and banks had borrowed in dollars but earned revenue in local currencies, making their debts much harder to repay after devaluation.

The crisis was regional rather than limited to Thailand. The International Monetary Fund organized assistance programs for several affected economies, with conditions attached. Hong Kong’s currency peg survived, but its stock market suffered a major fall in October 1997, an event sometimes discussed separately from the initial Thai shock.