Thailand began the 1997 Asian financial crisis when it devalued the baht.
On July 2, 1997, Thailand abandoned its long-standing effort to maintain the baht's value against the U.S. dollar and allowed the currency to float. The baht then lost substantial value. Investors, banks, and companies had built up large dollar-denominated debts, so the currency collapse made those obligations much harder to repay.
Financial pressure spread rapidly across East and Southeast Asia. Indonesia, South Korea, Malaysia, and other economies experienced falling currencies, collapsing asset prices, corporate failures, and banking distress. The International Monetary Fund arranged rescue programs for several countries, including Thailand, Indonesia, and South Korea.
The crisis was not simply a stock-market event: it involved currencies, banks, property markets, and foreign debt. Thailand's baht decision is nevertheless widely treated as the starting point because it triggered the regional loss of confidence. The crisis later affected Russia and contributed to the collapse of Long-Term Capital Management in the United States.