Thailand became the center of the 1997 Asian financial crisis that began with a currency and market collapse.
Thailand was at the center of the 1997 Asian financial crisis after it abandoned the baht's fixed exchange-rate policy on July 2, 1997. Speculators had pressured the currency, and the country's central bank could no longer defend the peg effectively. The baht then depreciated sharply, helping trigger broader regional turmoil.
The crisis spread to Indonesia, South Korea, Malaysia, and other economies. Stock markets fell, currencies weakened, companies struggled with foreign-currency debt, and financial institutions faced insolvency. International lenders and governments assembled rescue programs, while the International Monetary Fund provided major assistance to several affected countries.
The crisis is often called a stock-market crash because equity markets plunged, but its roots were broader. Fixed or tightly managed exchange rates, heavy short-term foreign borrowing, weak financial regulation, property speculation, and sudden capital outflows all played important roles. The episode reshaped economic policy across East and Southeast Asia.