Thailand is commonly identified as the starting point of the 1997 Asian financial crisis. On July 2, 1997, Thailand abandoned its fixed exchange-rate system and allowed the baht to float after intense pressure on its currency reserves.
The baht’s devaluation exposed weaknesses that extended beyond foreign exchange markets. Thai companies and banks had accumulated substantial foreign-currency debts, and falling confidence encouraged further capital flight. Financial stress then spread through Southeast Asia and later affected South Korea and other markets.
The crisis was not simply a stock-market event. Currency devaluations, property-market collapses, corporate debt, and banking failures interacted with share-price declines. Indonesia, Malaysia, South Korea, and Thailand were among the most affected economies. The International Monetary Fund arranged assistance programs for several countries, while Hong Kong defended its currency and stock market during intense pressure.