Thailand began the 1997 Asian financial crisis by devaluing the baht in July 1997.
For years, Thailand had maintained a largely fixed exchange rate between the baht and the US dollar. Heavy borrowing, property speculation, current-account deficits, and pressure on the country’s foreign-exchange reserves made that policy increasingly difficult to defend.
On July 2, 1997, Thailand allowed the baht to float after spending reserves trying to support it. The currency lost substantial value, and financial stress spread to Indonesia, South Korea, Malaysia, and other economies. Stock markets fell sharply as investors withdrew capital from the region.
The crisis was not simply a stock-market event: banking failures, currency collapses, corporate debt, and international rescue packages were all involved. The International Monetary Fund arranged a major assistance program for Thailand, while other countries received separate support.