The Thai baht crisis triggered the 1997 Asian financial crisis and helped cause stock-market collapses across the region.
Thailand abandoned its long-standing exchange-rate arrangement on July 2, 1997, allowing the baht to float after authorities could no longer defend it against speculative pressure. The currency then lost substantial value, making foreign-currency debts much harder for Thai companies and financial institutions to repay.
Investors quickly reassessed other Asian economies with large current-account deficits, heavy borrowing, property bubbles, or currencies closely linked to the U.S. dollar. Pressure spread to Indonesia, South Korea, Malaysia, and the Philippines, producing sharp currency devaluations, market declines, bankruptcies, and recessions.
The crisis was not caused by one identical weakness everywhere. Each country had its own banking, corporate, and policy problems. The International Monetary Fund provided major assistance to Thailand, Indonesia, and South Korea, while the turmoil also helped prompt later reforms to regional financial cooperation and reserve management.