Thailand devalued the Thai baht in July 1997, helping spark the Asian financial crisis.
For years, Thailand had maintained a close link between the baht and the U.S. dollar while borrowing heavily in foreign currencies. Investors became concerned about Thailand’s current-account deficit, property-market boom, and declining foreign-exchange reserves. Speculators then pressured the baht, forcing the country to abandon its fixed exchange-rate policy on July 2, 1997.
The baht’s fall made foreign-currency debts more expensive for Thai companies and banks. Financial stress spread to other economies, including Indonesia, South Korea, Malaysia, and the Philippines. Stock markets and currencies across the region fell sharply, while many businesses faced insolvency.
The crisis was not simply a stock-market event: it involved currencies, banks, corporate debt, and international capital flows. The International Monetary Fund arranged a major support program for Thailand later in 1997.