Which financial crisis began after Thailand abandoned its baht peg in July 1997?

The financial crisis that began after Thailand abandoned its baht peg in July 1997 was the Asian financial crisis.

Thailand allowed the baht to float on July 2, 1997, after intense pressure on its foreign-exchange reserves. The currency rapidly lost value, and financial stress spread to countries whose banks and companies had large foreign-currency debts or depended on continued capital inflows. Stock markets in Thailand, Indonesia, South Korea, and other economies fell sharply.

The crisis was not solely a stock-market crash. Currency collapses, bank failures, corporate debt, property bubbles, and sudden withdrawals of international capital were closely connected. Investors reassessed risk across the region, creating contagion that moved beyond Thailand.

The International Monetary Fund organized assistance programs for several affected economies, including Thailand, Indonesia, and South Korea. Recovery paths differed by country, and Hong Kong defended its currency and stock market in 1998. The crisis also influenced later debates about foreign-exchange regimes, capital controls, reserve accumulation, and the risks of short-term external borrowing.