2 July 1997: Thailand lets the baht go

After months of spending reserves to defend its dollar peg, Thailand gave up and floated the baht. The currency dropped sharply, and investors started asking which other Asian economies had borrowed in dollars while earning in local money. The answer was: many. Within months the crisis had spread to Indonesia, South Korea and beyond, toppling currencies, banks and governments. A fixed exchange rate looks stable right up until the day it is not.

The lesson: Borrowing in one currency while earning in another works fine until it suddenly and very expensively does not.