Which Asian currency crisis began with Thailand’s devaluation of the baht in 1997?

Thailand’s baht devaluation in 1997 helped begin the Asian financial crisis.

On July 2, 1997, Thailand abandoned its fixed exchange-rate arrangement and allowed the baht to float. The currency then lost substantial value, and pressure spread to other economies with large foreign-currency debts, weak financial institutions, or vulnerable exchange-rate systems.

The crisis affected Indonesia, South Korea, Malaysia, and the Philippines, among others. Stock markets and currencies fell sharply, while companies and banks struggled to repay debts denominated in US dollars. International rescue programs, including major assistance from the International Monetary Fund, followed.

The crisis is not identical to the 1998 Russian financial crisis, although the events were connected through global investor sentiment. Thailand’s currency decision is widely used as the crisis’s starting point.