Thailand’s stock-market and currency crash in 1997 helped spread the Asian financial crisis across the region.
The crisis intensified after Thailand devalued the baht on 2 July 1997 and abandoned its fixed exchange-rate policy. Investors had become concerned about high foreign-currency debts, weak financial institutions, property speculation, and large current-account deficits.
Capital then flowed out of several Asian economies. Indonesia, South Korea, Malaysia, and the Philippines experienced severe financial stress, while stock markets and currencies fell sharply. The crisis also affected Hong Kong and contributed to turbulence in global markets.
Thailand was the initial flashpoint, not the only country responsible for the crisis. The International Monetary Fund arranged assistance programs for several affected economies, although the conditions attached to those programs remain debated by economists and policymakers.