Thailand’s government floated the Thai baht on July 2, 1997, helping trigger the 1997 Asian financial crisis.
Before the decision, the baht was managed within a narrow exchange-rate regime linked mainly to the U.S. dollar. Speculators attacked the currency after Thailand’s foreign-exchange reserves came under pressure, and authorities could no longer defend the rate effectively.
The baht’s plunge quickly spread through financial markets in East and Southeast Asia. Indonesia, South Korea, Malaysia, and the Philippines experienced severe currency and stock-market stress, although each country had different economic conditions and policy responses.
The International Monetary Fund organized assistance programs for several affected economies. The crisis involved high private-sector debt, weak financial supervision, fixed or semi-fixed exchange rates, and rapid reversals of international capital. It was not simply a currency crisis, because banks, companies, and equity markets were also badly affected.