On July 2, 1997, the Thai baht collapsed. After waves of speculative attacks, the government had run out of foreign currency and become unable to support its exchange-rate peg to the U.S. dollar. So, it floated the baht, which went into freefall.
A wave of financial and nonfinancial Thai corporates that had borrowed heavily in dollars filed for bankruptcy. The Asian financial crisis had begun.
Unable to service their foreign debt, Thailand, Indonesia and South Korea turned to the International Monetary Fund for support. But the IMF’s rescue packages were too little, too late, and came with excessively harsh conditions. East Asia, it increasingly appeared, would be better off saving itself.