---
node: asian_financial_crisis_1997
type: event
slug: asian_financial_crisis_1997
title: "1997 Asian Financial Crisis"
lead: "On July 2, 1997, the Bank of Thailand floated the baht after exhausting much of its reserves defending the dollar peg, and the currency lost roughly half its value against the dollar within months. The collapse spread across Asia and became the Asian financial crisis."
published: 2026-07-10
updated: 2026-08-27
change: "Rewrote the opening body section so that it no longer restates the page's own lead."
previous_hash: "cd33dab198d0ed64075ea83459edefa3689d4f9e69c3cb70fcaf00c9dbf63614"
requester: internal
reason: "The section repeated the lead, so the first thing under the first heading was text the reader had already read in the search result."
---

## What happened

The baht went from about 25 to the dollar to more than 50 by January 1998, and the contagion travelled the same route everywhere: short-term dollar debt owed by companies whose income was in a currency that had just halved. The IMF assembled rescue packages of some 17 billion dollars for Thailand, 40 billion for Indonesia and 58 billion for South Korea — the largest it had ever put together — against conditions of high interest rates and deep budget cuts that are still argued about. Indonesia was hit hardest: the rupiah lost around four-fifths of its value, and in May 1998 Suharto resigned after thirty-one years in power. In Thailand the episode is called the Tom Yum Kung crisis.

## Background

By the standard account, years of boom financed by heavy short-term dollar borrowing, a property bubble, an export slowdown in 1996 and failures among finance companies had strained the pegged exchange rate.

## Consequences

An IMF-led rescue package of about 17.2 billion US dollars followed in August 1997, with austerity and restructuring conditions. Thailand fell into a deep recession in 1998 as the economy shrank sharply, and dozens of finance companies were closed. The Chavalit government fell in November 1997. Recovery took hold in the early 2000s, and the crisis reshaped debate about capital flows and IMF prescriptions.

**This page was corrected.** Rewrote the opening body section so that it no longer restates the page's own lead.

**Why.** The section repeated the lead, so the first thing under the first heading was text the reader had already read in the search result.

**Who asked.** The Media Division itself.