Thailand’s currency crisis began when the country floated the baht during the 1997 Asian financial crisis.
On July 2, 1997, Thailand abandoned the baht’s managed exchange-rate regime after intense pressure on its foreign-exchange reserves. The currency then lost substantial value. Thailand had accumulated large foreign debts, much of them owed by private companies, while property and financial-market speculation had expanded rapidly.
The baht’s collapse triggered a regional crisis. Investors reassessed risks across Southeast and East Asia, and capital fled several economies. Indonesia, South Korea, Malaysia, and the Philippines experienced serious currency or financial stress. The International Monetary Fund organized assistance programs for several affected countries, including Thailand, Indonesia, and South Korea.
The crisis is often called the Asian financial crisis, although its causes and effects differed from country to country. It was not simply a stock-market crash: exchange rates, banks, property markets, corporate debt, and international capital flows all played major roles. Thailand’s decision on July 2 is widely treated as the crisis’s starting point.