Which 1997 financial crisis began in Thailand before spreading across East and Southeast Asian markets?

The 1997 financial crisis that began in Thailand and spread across East and Southeast Asian markets was the Asian financial crisis.

Thailand abandoned the baht’s fixed exchange-rate system on July 2, 1997, after intense pressure on its foreign-exchange reserves. The baht then depreciated sharply. Investors reassessed other economies with high foreign-currency debt, property speculation, and fixed or semi-fixed exchange rates, causing capital flight across the region.

Indonesia, South Korea, Malaysia, and the Philippines were among the economies hit particularly hard. Stock markets fell, currencies weakened, companies struggled to repay dollar-denominated loans, and several banking systems required emergency support. The International Monetary Fund arranged a large assistance program for South Korea and major programs for Indonesia and Thailand.

The crisis is sometimes reduced to a simple stock-market crash, but it was also a currency and banking crisis. Hong Kong’s currency peg survived, although its stock market suffered a severe decline. The turmoil later influenced debates about financial regulation and international capital flows.