Historical Sketch

The first Thai states emerged in the 13th century with the Sukhothai and Ayutthaya kingdoms. In 1782, the Chakri dynasty took power and founded the Rattanakosin (Bangkok) kingdom, which internationally became referred to as Kingdom of Siam. In 1939, the current name of Kingdom of Thailand was introduced. During World War II, Thailand was occupied by Japan but kept independency as an ally. Subsequently it annexed borderlands from the British colonies of Malaya and Burma and from French Indochina as they were conquered by the Japanese forces. In mid-1945, the Free Thai Movement took power and Thailand changed alliance. In the following peace treaties with Allied Powers, all annexed territories were returned to the European colonial powers.

Monetary History Overview

Traditionally, the Thai economy was based on silver. In transactions, bullion was used in form of bars and smaller so-called "bullet money". The Baht (internationally referred to as "Tical") was the commonly used weight unit. Cowrie snails served as subsidiary coinage, in the 18th and 19th century also supplemented and replaced by gaming tokens made of porcelain or glass. In 1860, King Rama IV modernised the Thai monetary system. The Thai Baht became the national currency in a silver standard. The cowries and gaming pieces were gradually replaced by metallic subsidiary coins, the "bullet money" was tolerated in trade until 1904. Gold coins were issued in small numbers after 1863. Their value was nominally fixed against silver, but they were traded for bullion. In 1902, the Thai Baht switched to the gold standard, and the government began issuing paper money. In 1908, the Baht got pegged to the Pound Sterling and remained so until the Second World War. In 1941, Thailand was forced into an alliance with Japan. The Baht repegged to the Japanese Yen in January 1942 and got devalued by 36% a few months later. Under Japanese influence, the Bank of Thailand was created as central bank and began operations in December 1942. After the Japanese defeat of August 1945 and the Anglo-Thai peace agreement of January 1946, the Baht repegged to the Pound Sterling at about half of the pre-war rate. Before, in February 1946, excess cash holdings had been confiscated when the largest denomination banknote, which had been issued during wartime, was invalidated and the amount withheld as government bond. Thailand did only partially follow the Sterling devaluation of 1949, and beginning of 1956, the Baht repegged to the US Dollar. The rate remained unchanged for more than twenty years. After the floating of March 1978, the Baht kept its value for the next two decades. In the South East Asian currency crisis of 1997, the Baht was the main focus of the financial speculation and lost almost 50% of its value. A part of the loss could be recovered later on, and since the mid-2000s, the Baht has remained stable.

Thailand joined the International Monetary Fund (IMF) on 03.05.1949.

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