Which Asian market crisis began with Thailand’s baht devaluation in July 1997?

The Asian financial crisis began with Thailand’s baht devaluation in July 1997.

Thailand had maintained a close link between the baht and the U.S. dollar while borrowing heavily in foreign currencies. Pressure from speculative attacks, falling confidence, and economic weaknesses forced the country to abandon the baht’s fixed exchange rate on July 2, 1997.

The crisis spread through financial and currency markets in Indonesia, South Korea, Malaysia, and other economies. Falling currencies made foreign-currency debts more expensive, while investors withdrew capital and stock markets declined. International institutions, including the International Monetary Fund, arranged assistance programs for several affected countries.

The Asian financial crisis is not identical to the 1998 Russian financial crisis, although the events were connected through global investor confidence. Nor was it simply a stock-market crash: currency devaluations, banking stress, debt, and recessions were central parts of the episode.