The Thai baht came under attack at the start of the 1997 Asian financial crisis.
Thailand had maintained a currency peg that linked the baht closely to the U.S. dollar. Heavy borrowing, a property boom, weak financial institutions, and a large current-account deficit made the arrangement increasingly difficult to defend. Speculators began selling the baht and demanding dollars.
On July 2, 1997, Thailand allowed the baht to float after spending substantial foreign-exchange reserves trying to support it. The currency then depreciated sharply, and financial stress spread through other Asian economies.
Indonesia, South Korea, Malaysia, and the Philippines were among the countries affected. Stock markets fell, banks and companies faced foreign-currency debts, and the International Monetary Fund organized support programs for several nations. The crisis was therefore regional, although it began with pressure on Thailand’s currency rather than with a single stock-exchange collapse.