Thailand’s currency crisis sparked the 1997 Asian financial crisis.
On July 2, 1997, Thailand abandoned its long-standing dollar peg and allowed the baht to float. The currency fell sharply, exposing large foreign-currency debts held by Thai companies and financial institutions. Investors then reassessed other Asian economies with high borrowing, property speculation, and vulnerable banking systems.
The turmoil spread to Indonesia, South Korea, Malaysia, and the Philippines. Stock markets and currencies plunged, businesses failed, and several governments required international assistance. The International Monetary Fund arranged major support programs, including a large package for South Korea.
Thailand was the starting point, but the crisis was regional rather than confined to one country. Russia’s 1998 default and ruble devaluation was a later, separate crisis, although international investors and financial institutions connected the episodes.