The Thai baht began the 1997 Asian financial crisis after Thailand abandoned its fixed exchange rate and allowed the currency to float on July 2, 1997.
Thailand had maintained a baht peg closely linked to the U.S. dollar, but speculative attacks and declining foreign reserves made the arrangement difficult to defend. The baht then lost substantial value, exposing weaknesses in Thailand’s financial system and corporate debt structure.
Financial pressure spread to Indonesia, South Korea, Malaysia, and other economies. The International Monetary Fund organized assistance programs, including a major package for South Korea. The crisis also affected Russia and contributed to market turmoil elsewhere.
The currency is often confused with the Indonesian rupiah or South Korean won because those currencies also suffered dramatic declines. The baht is the precise answer because Thailand’s July 1997 devaluation marked the crisis’s usual starting point.