The Thai baht was devalued after Thailand’s central bank abandoned its currency peg on July 2, 1997. The decision is widely treated as the starting point of the Asian financial crisis.
Thailand had maintained the baht within a target range against the U.S. dollar, but heavy borrowing, property speculation, export weakness, and pressure from currency traders made the arrangement increasingly difficult to defend. After spending foreign-exchange reserves trying to support the baht, authorities allowed it to float. Its value fell, increasing the local-currency burden of dollar-denominated debt.
Financial stress then spread through several Asian economies. Indonesia, South Korea, Malaysia, and other markets experienced currency declines, falling stock prices, banking problems, and emergency assistance programs. The crisis was regional rather than limited to Thailand, but the baht’s break with its peg became its defining opening event. The International Monetary Fund later coordinated major support for several affected countries.