The Thai baht fell sharply during Thailand's role in the 1997 Asian financial crisis.
Thailand had maintained a close link between the baht and the US dollar while borrowing heavily in foreign currencies. Speculative pressure grew as investors questioned whether the country could defend that exchange-rate policy and repay its external debts.
On July 2, 1997, Thailand abandoned the baht's fixed exchange-rate regime and allowed the currency to float. It then depreciated substantially, helping trigger financial turmoil across several Asian economies.
The crisis spread to Indonesia, South Korea, Malaysia, and other markets through currency devaluations, capital flight, banking failures, and corporate debt problems. The International Monetary Fund organized assistance programs, although their conditions remain debated. A common mix-up is calling the event only a stock-market crash: currency and banking crises were equally central.