Thailand’s baht devaluation on 2 July 1997 is widely seen as the starting point of the Asian financial crisis.
Thailand had maintained a managed exchange rate linking the baht closely to the U.S. dollar. After heavy pressure from currency speculators and falling confidence, the government allowed the baht to float on 2 July 1997. The currency then lost substantial value, making foreign-currency debts more difficult to repay.
Financial stress spread to other economies, including Indonesia, South Korea, Malaysia, and the Philippines. Many banks and companies had borrowed in dollars while earning revenue in local currencies, increasing the damage caused by depreciation. The crisis was regional rather than limited to Thailand, but Thailand’s decision to float the baht is the conventional starting marker used in histories of the episode.