The Thai baht was devalued after Thailand helped begin the 1997 Asian financial crisis.
Thailand had maintained a managed exchange rate that kept the baht closely linked to the U.S. dollar. Speculators attacked the currency after concerns grew about Thailand’s foreign-currency debt, property-market weakness, and a large current-account deficit. On July 2, 1997, Thailand allowed the baht to float, and it lost substantial value.
The pressure quickly spread across East and Southeast Asia. Indonesia’s rupiah, South Korea’s won, and Malaysia’s ringgit all experienced severe stress, although each country had its own economic circumstances. Falling currencies made dollar-denominated debts more expensive to repay and damaged banks and companies with heavy foreign borrowing.
The International Monetary Fund arranged assistance programs for several affected economies, including Thailand, Indonesia, and South Korea. The crisis was not simply a stock-market event: currency collapses, banking problems, debt, and investor flight reinforced one another across the region.