The Thai baht’s devaluation officially began Thailand’s role in the 1997 Asian financial crisis.
On July 2, 1997, Thailand abandoned its fixed exchange-rate system and allowed the baht to float. The currency then lost substantial value, helping trigger financial stress across several East and Southeast Asian economies.
Thailand had accumulated large foreign-currency debts, while property and asset prices had risen rapidly. When confidence weakened, capital flowed out, companies struggled to repay dollar-denominated loans, and stock markets fell.
The crisis spread to Indonesia, South Korea, Malaysia, and other economies, although each country had different financial conditions. The International Monetary Fund organized assistance programs, including a major package for Thailand. The baht is the key currency in the question because Thailand was the crisis’s initial flashpoint.