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.