Which 1997 financial crisis began in Thailand after the baht was floated and spread across Asian stock markets?

The 1997 financial crisis that began in Thailand after the baht was floated was the Asian financial crisis.

Thailand abandoned its baht peg to the U.S. dollar on July 2, 1997, after intense pressure on its foreign-exchange reserves. The baht then depreciated sharply, exposing companies and banks that had borrowed heavily in foreign currencies.

Financial stress spread to Indonesia, South Korea, Malaysia, and other economies. Stock markets fell, currencies weakened, and several countries needed emergency assistance from the International Monetary Fund and other institutions. The crisis affected investment, employment, and public finances across the region.

The episode was not simply a stock-market crash. Currency pegs, short-term foreign debt, property bubbles, weak financial supervision, and rapid capital outflows all mattered. Hong Kong’s market also experienced severe pressure, although its currency peg survived.