The Thai baht was devalued in July 1997, helping trigger the Asian financial crisis and a major regional stock-market sell-off.
Thailand had maintained a currency peg that limited the baht’s movement against a basket dominated by the U.S. dollar. After pressure from speculative attacks and declining foreign-exchange reserves, the country allowed the baht to float on July 2, 1997. It then lost substantial value.
The crisis spread through economies with heavy foreign-currency borrowing, vulnerable banks, property bubbles, and large capital inflows. Indonesia, South Korea, and Malaysia were among the countries hit particularly hard, while stock markets and currencies fell across the region.
The baht was the starting point, not the only currency involved. The crisis later led to international rescue programs, including a large International Monetary Fund package for South Korea and assistance for other affected economies.