Thailand’s baht devaluation on July 2, 1997, marked the start of the Asian financial crisis.
Thailand had maintained a relatively fixed exchange rate for the baht, but heavy borrowing, property speculation, and pressure on foreign-exchange reserves made that policy difficult to sustain. On July 2, the government allowed the baht to float, and its value fell substantially.
Financial stress then spread through other economies, including Indonesia, South Korea, Malaysia, and the Philippines. Investors withdrew capital, local currencies weakened, companies struggled with foreign-currency debt, and stock markets fell. The International Monetary Fund arranged assistance packages for several affected countries.
The crisis is often called the Asian financial crisis, although its effects varied greatly by country. It was not simply a stock-market event: currency markets, banks, corporations, and property markets were all involved. Thailand’s exchange-rate decision is the standard chronological starting point.