Thailand let the baht float on 2 July 1997, an event widely regarded as the trigger for the Asian financial crisis.
Before the decision, Thailand had maintained a managed exchange-rate arrangement that kept the baht closely tied to the U.S. dollar. Speculators attacked the currency after concerns grew about Thailand’s current-account deficit, property-market weakness, corporate debt, and the central bank’s ability to defend the peg. After spending foreign reserves, authorities abandoned the arrangement and allowed the baht to trade more freely.
The baht’s collapse raised doubts about other economies with similar vulnerabilities. Financial pressure spread through Southeast Asia and later reached South Korea and other markets. The International Monetary Fund organized assistance for Thailand, Indonesia, and South Korea, although the programs required difficult economic reforms.
The date is not the date of the first stock-market fall in the region; it identifies the currency decision that turned existing financial strains into a broader international crisis.