The Thai baht began the 1997 Asian financial crisis when Thailand abandoned its dollar peg.
On July 2, 1997, Thailand allowed the baht to float after authorities could no longer defend its fixed exchange-rate arrangement. The currency depreciated sharply, and financial pressure spread across several Asian economies. Investors questioned exchange-rate systems, corporate debt, bank balance sheets, and the ability of governments to support their currencies.
The crisis affected Indonesia, South Korea, Malaysia, the Philippines, and other economies, although the severity and timing differed by country. Many firms and banks had borrowed in foreign currencies, making their debts more expensive when local currencies fell.
The International Monetary Fund organized assistance programs for several affected countries. The episode became a major example of how capital can move rapidly across borders and how currency stress can become a broader banking and stock-market crisis.