Thailand experienced the 1997 stock-market crash that began with the devaluation of the baht.
On July 2, 1997, Thailand abandoned its fixed exchange-rate system and allowed the baht to float. The currency then lost substantial value, exposing weaknesses in Thailand’s banks, finance companies, and heavily indebted businesses. The event helped trigger the Asian financial crisis.
Before the crisis, Thailand had received large inflows of foreign capital and experienced rapid growth in property and financial markets. Much borrowing was denominated in foreign currencies, so the baht’s fall made debts more expensive in local-currency terms. Investors began withdrawing funds from several Asian economies.
The crisis spread to Indonesia, Malaysia, South Korea, and other markets, producing sharp currency and stock-price declines. Thailand received an International Monetary Fund-supported rescue program, accompanied by financial and economic reforms. The episode is sometimes called the Asian financial crisis rather than a single stock-market crash because currency markets, banking systems, property markets, and share exchanges all became connected parts of the turmoil.