The Thai Baht

Thai Baht

 

The Thai baht ( code: THB) is the currency of Thailand. It is subdivided into 100 satang. The issuance of currency is the responsibility of the Bank of Thailand.

The baht, like the pound, originated from a traditional unit of mass.  Its currency value was originally expressed as that of silver of corresponding weight (now defined as fifteen grams), and was in use probably as early as the Sukhothai period in the form of bullet coins known in Thai as photduang.  These were pieces of solid silver cast to various weights corresponding to a traditional system of units related by simple fractions and multiples, one of which is the baht.

Until November 27, 1902, the baht was fixed on a purely silver basis, with 15 grams of silver to the baht. This caused the value of the currency to vary relative to currencies on a gold standard. In 1857, the values of certain foreign silver coins were fixed in law, with the one baht = 0.6 Straits dollar and five baht = seven Indian rupees. Before 1880 the exchange rate was fixed at eight baht per pound sterling, falling to 10 to the pound during the 1880s.

In 1902, the government began to increase the value of the baht by following all increases in the value of silver against gold but not reducing it when the silver price fell. Beginning at 21.75 baht = one British pound, the currency rose in value until, in 1908, a fixed peg to the British pound was established of 13 baht = one pound. This was revised to 12 baht in 1919 and then, after a period of instability, to 11 baht in 1923. During World War II, the baht was fixed at a value of one Japanese yen.

From 1956 until 1973, the baht was pegged to the U.S. dollar at an exchange rate of 20.8 baht = one dollar and at 20 baht = 1 dollar until 1978. A strengthening US economy caused Thailand to re-peg its currency at 25 to the dollar from 1984 until July 2, 1997, when the country was stung by the Asian financial crisis. The baht was floated and halved in value, reaching its lowest rate of 56 to the dollar in January 1998. It has since risen to about 30 per dollar.

The baht was originally known to foreigners by the Malay/Portuguese term, tical, which was used in the English language text on banknotes until 1925.