The Thai baht was devalued at the start of the 1997 Asian financial crisis and stock-market crash.
Thailand abandoned its fixed exchange-rate system on July 2, 1997, allowing the baht to float. The currency then lost substantial value, and financial stress spread through economies whose companies and banks had borrowed heavily in foreign currencies. Stock markets across East and Southeast Asia fell as investors reassessed risk.
The crisis affected Thailand, Indonesia, South Korea, Malaysia, and other economies. International Monetary Fund assistance became central to rescue programs, although the required austerity and reforms were controversial. Indonesia experienced especially severe political and economic consequences.
The crisis is sometimes reduced to a currency event, but it also involved weak financial supervision, property bubbles, short-term foreign debt, and fragile banking systems. The baht’s devaluation was the trigger that exposed these underlying vulnerabilities.