The flotation of the Thai baht marked the start of the 1997 Asian financial crisis.
Thailand had maintained the baht within a narrow exchange-rate range, largely linking it to the US dollar. Heavy borrowing, property speculation, and pressure from currency traders made that policy increasingly difficult to defend. On 2 July 1997, Thailand abandoned the baht’s peg and allowed the currency to float.
The baht then lost substantial value, and financial stress spread across East and Southeast Asia. Indonesia, South Korea, Malaysia, and other economies experienced sharp currency falls, banking problems, or stock-market declines. International lenders and governments assembled rescue programs, including a major International Monetary Fund package for Thailand.
The crisis is sometimes called the Asian financial crisis or Asian currency crisis. It was not caused by one identical problem in every country; weak banks, foreign-currency debt, property bubbles, and fixed exchange rates varied by economy.