Which 1997 financial crisis began with Thailand's devaluation of the baht and spread through Asian stock markets?

The 1997 financial crisis that began with Thailand's devaluation of the baht and spread through Asian stock markets was the Asian financial crisis. Thailand abandoned the baht's peg to the U.S. dollar on July 2, 1997, after pressure on its foreign-exchange reserves.

The crisis reflected several vulnerabilities, including heavy short-term foreign borrowing, fixed or managed exchange rates, property speculation, and weak financial institutions. Once confidence broke, capital flowed out of Thailand and then affected Indonesia, South Korea, Malaysia, the Philippines, and other economies.

Stock markets and currencies fell sharply, while companies and banks struggled with debts denominated in foreign currencies. The International Monetary Fund arranged assistance programs for several countries, including Thailand, Indonesia, and South Korea. Hong Kong's currency peg survived, but its stock market suffered severe volatility. The crisis also contributed to a major Russian default in 1998 and global market turbulence.