Thailand experienced the 1997 Asian financial crisis that began with a stock-market and currency collapse in Bangkok.
Thailand became the crisis’s starting point when it abandoned the baht’s fixed exchange-rate regime on July 2, 1997. The baht then fell sharply, after years of heavy borrowing, property speculation, current-account deficits, and pressure on foreign-exchange reserves. Thailand’s stock market also suffered a major decline.
The turmoil spread rapidly across East and Southeast Asia. Indonesia, South Korea, Malaysia, and the Philippines faced currency depreciation, falling asset prices, corporate failures, and banking stress. Investors reassessed the risks of economies that had appeared to be successful “Asian Tigers.”
The International Monetary Fund assembled rescue packages for several affected countries, including Thailand, Indonesia, and South Korea. The crisis produced severe recessions and political consequences, especially in Indonesia and South Korea.
Thailand is the answer because the crisis began with pressure on its baht and financial system. Malaysia, Indonesia, and South Korea were major victims, but they were not the initial location of the collapse.