Which regional crisis began with Thailand’s baht devaluation in July 1997 and spread across Asian markets?

The regional crisis that began with Thailand’s baht devaluation in July 1997 and spread across Asian markets was the Asian financial crisis.

Thailand abandoned its fixed exchange-rate defense and allowed the baht to float on July 2, 1997. The currency then lost substantial value, and pressure spread to other economies whose companies and banks had accumulated large foreign-currency debts or relied heavily on short-term capital inflows.

Indonesia, South Korea, and other countries experienced severe financial stress, while stock markets and currencies fell. The International Monetary Fund arranged assistance programs, including a major package for South Korea. Hong Kong defended its currency peg during intense pressure, and Japan also faced financial difficulties. The crisis is sometimes called the Asian currency crisis, but its effects included banking failures, corporate insolvencies, recessions, and major stock-market losses.