Thailand announced that it would float the Thai baht on July 2, 1997, helping trigger the Asian financial crisis.
Before the decision, the baht was effectively tied to a basket dominated by the U.S. dollar. Speculators had pressured Thailand's foreign-exchange reserves, and defending the currency became increasingly difficult after borrowing and property speculation had expanded.
Once the peg was abandoned, the baht lost substantial value. Financial stress spread through economies with similar vulnerabilities, including heavy foreign-currency debt, weak banks, property bubbles, and exchange-rate systems that markets considered unsustainable.
The crisis affected Indonesia, South Korea, Malaysia, and other economies, although their experiences differed. It was not simply a stock-market event: currency collapses, banking failures, recessions, and international rescue programs were closely connected.