Thailand’s stock exchange suffered the 1997 crash that helped launch the Asian financial crisis.
The crisis began with pressure on Thailand’s baht, which had been effectively pegged to the U.S. dollar. On 2 July 1997, Thailand allowed the baht to float after exhausting foreign-exchange reserves defending the peg. Currency weakness quickly damaged highly leveraged companies and financial institutions.
Thailand’s financial stress spread across East and Southeast Asia. Indonesia, South Korea, Malaysia, and other economies experienced currency collapses, falling asset prices, banking failures, and recessions. The International Monetary Fund organized a major assistance program for Thailand, followed by programs for Indonesia and South Korea.
Thailand was the starting point, but it was not the only country severely affected. Japan experienced prolonged financial weakness during the same period, while Hong Kong defended its currency and stock market under intense pressure.