Which 1997 market crisis began in Thailand and spread across several East and Southeast Asian economies?

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

The crisis began when Thailand abandoned its fixed exchange-rate policy for the baht on July 2, 1997. After months of pressure from currency speculation and declining confidence, the baht was allowed to float and quickly lost value. Investors then reassessed other economies whose currencies, banks, or corporations carried heavy foreign-currency debts.

The turmoil spread to Indonesia, South Korea, Malaysia, and the Philippines, among others. Currency devaluations, falling stock prices, corporate failures, and banking problems produced deep recessions in several affected countries. International Monetary Fund assistance played a major role in stabilization programs for Thailand, Indonesia, and South Korea.

The crisis was not limited to Asia. Financial stress later reached Russia and other emerging markets, contributing to the collapse of the hedge fund Long-Term Capital Management in the United States in 1998. The episode also encouraged many Asian governments to build larger foreign-exchange reserves.