Thailand’s currency crisis began the 1997 Asian financial crisis that triggered regional stock-market crashes.
On July 2, 1997, Thailand abandoned its fixed exchange-rate regime for the baht after intense pressure on the currency. The baht then fell sharply, exposing weaknesses involving foreign-currency debt, property speculation, banks, and heavily leveraged companies.
The turmoil spread through Southeast Asia and beyond. Indonesia, South Korea, Malaysia, and the Philippines experienced severe financial stress, while stock markets and currencies lost substantial value. International rescue programs, including a major International Monetary Fund package for South Korea, became central to the response.
The crisis is sometimes called the “Asian stock-market crash,” but its initial trigger was a currency and financial-system breakdown in Thailand rather than a single exchange trading session. Hong Kong’s market also suffered a major October 1997 sell-off, although Hong Kong did not start the crisis.