Which 1997 financial crisis began after Thailand devalued its baht on July 2?

The 1997 financial crisis triggered by Thailand’s baht devaluation was the Asian financial crisis.

Thailand abandoned its fixed exchange-rate system on July 2, 1997, allowing the baht to float after intense pressure on the currency. The baht then lost substantial value, and financial stress spread to other economies that had accumulated foreign-currency debt, fragile banks, property bubbles, or large capital inflows.

Indonesia, South Korea, Malaysia, and the Philippines were among the countries severely affected. Stock markets and currencies fell, companies struggled to repay dollar-denominated loans, and several governments sought assistance from the International Monetary Fund. The crisis also exposed weaknesses in financial supervision and corporate borrowing.

The event is often called the Asian financial crisis, although its effects reached beyond Asia. Russia later defaulted in 1998, and Brazil faced pressure afterward, showing how investors and capital markets connected the regional shock to broader global finance.