Thailand helped trigger the 1997 Asian financial crisis when it devalued the Thai baht.
On July 2, 1997, Thailand abandoned its long-standing exchange-rate peg and allowed the baht to float. The currency then fell sharply, revealing the fragility of Thailand’s financial system and increasing the burden of foreign-currency debt.
Investors soon became concerned about other Asian economies. Pressure spread to currencies and stock markets in Indonesia, Malaysia, South Korea, and elsewhere. International Monetary Fund assistance programs followed for several affected countries, although their conditions were controversial.
The crisis was not caused by the baht alone. Excessive borrowing, property bubbles, weak banks, and large short-term foreign debts made several economies vulnerable. Still, Thailand’s currency decision is widely used as the crisis’s starting point.