The Thai baht was the currency forced to float during Thailand's role in the 1997 Asian financial crisis.
Thailand had maintained a close link between the baht and the U.S. dollar while borrowing heavily in foreign currency. Rapid credit growth, property speculation, and large current-account deficits made the arrangement increasingly vulnerable. When investors began selling baht, the central bank spent foreign reserves defending the peg.
On July 2, 1997, Thailand abandoned the fixed exchange-rate system and allowed the baht to float. The currency fell sharply, making foreign-currency debts much more expensive for Thai companies and banks. Financial stress then spread across East and Southeast Asia.
Indonesia, South Korea, Malaysia, and the Philippines also experienced severe pressure, although their currencies and policy responses differed. The International Monetary Fund organized assistance programs for several affected economies, with Thailand receiving a major rescue package.
The crisis is sometimes called the Asian stock-market crash, but currency and banking problems were equally central. The baht's devaluation was the key opening event, not the collapse of a single stock exchange.