The Thai baht was devalued on July 2, 1997, helping start the Asian financial crisis.
Thailand had maintained a managed exchange rate that closely linked the baht to the U.S. dollar. After intense speculative pressure depleted Thailand’s foreign-exchange reserves, the government allowed the currency to float on July 2. The baht then fell sharply.
The currency shock spread through financial markets across East and Southeast Asia. Investors reassessed countries with large foreign debts, weak banking systems, property bubbles, or currencies defended at costly exchange rates. Indonesia, South Korea, and Malaysia were among the economies severely affected.
The crisis was not caused by the baht alone. Rapid credit growth, short-term foreign borrowing, fragile financial institutions, and declining confidence all contributed. The International Monetary Fund arranged assistance programs for several affected countries. The episode is therefore often dated from Thailand’s currency decision while being understood as a wider regional financial crisis.