The Thai baht was devalued in 1997, helping trigger the Asian financial crisis.
Thailand abandoned its baht peg to the United States dollar on July 2, 1997, after intense pressure on the country’s foreign-exchange reserves. The baht then lost substantial value, exposing companies and banks that had borrowed heavily in foreign currencies.
Financial stress spread across Asia. Indonesia’s rupiah and South Korea’s won came under severe pressure, while stock markets in several countries suffered major declines. Large foreign-currency debts, weak financial institutions, property speculation, and fixed or managed exchange rates made the region vulnerable.
The International Monetary Fund organized assistance programs for Thailand, Indonesia, and South Korea, with conditions involving fiscal, monetary, and structural reforms. The crisis was not simply a stock-market event: currency devaluations, banking failures, corporate defaults, and equity-market crashes reinforced one another.