Which exchange-rate crisis began when Thailand floated the baht on July 2, 1997?

The Asian financial crisis began when Thailand floated the baht on July 2, 1997.

Thailand had maintained a close link between the baht and the U.S. dollar, but speculative attacks made that policy increasingly difficult to defend. After the central bank abandoned the peg and allowed the currency to float, the baht depreciated sharply. Financial stress then spread across several Asian economies.

Indonesia, South Korea, and Malaysia were among the countries most affected. Falling currencies increased the local-currency burden of dollar-denominated debts, while property and stock markets suffered heavy losses. Many companies and banks had borrowed extensively during years of rapid growth.

The crisis was regional rather than a single exchange collapse. The Mexican peso crisis began in 1994, the Russian financial crisis peaked in 1998, and Europe’s sovereign-debt crisis emerged much later. The Thai baht’s floating was the widely recognized starting point of the 1997 Asian crisis.