What Is the Thai Baht (THB)?
THB is the currency abbreviation for the Thai baht, the currency for the Kingdom of Thailand. The Thai baht is made up of 100 satangs and is denoted by the symbol ฿. Thailand’s central bank, the Bank of Thailand, manages the currency and issues it in banknote denominations of ฿20, ฿50, ฿100, ฿500 and ฿1,000. Coins have denominations of 25 satangs, 50 satangs, ฿1, ฿2, ฿5 and ฿10.
- The Thai Baht (THB) is the official currency of the Kingdom of Thailand.
- 1 THB is composed of 100 satangs and are issued by the central bank of Thailand.
- The Baht used to be pegged to the U.S. dollar but has been floating since 1997.
Background of the Thai Baht
Thai Baht (THB) has been used to refer to money in Thailand for centuries. However, the modern incarnation of the currency came about in the early 20th century, following the reforms of Chulalongkorn. Chulalongkorn is also known as King Rama V and reigned from 1868 to 1910. King Rama V introduced decimalization of the Thai Baht, which at the time was known as the Thai Tical by westerners.
Prince Wiwat first chaired the Bank of Thailand, founded in Bangkok in 1942. Prince Wiwat had a western education in finance from Cambridge University and Ecole des Sciences Politiques in Paris.
The Thai Baht became the focus of economic observers in 1997 when Thailand was the epicenter of the Asian financial crisis. It began after the Bank of Thailand was forced to abandon the Thai Baht pegging to the U.S. dollar (USD). This un-pegging caused the currency to collapse and instigated a wave of bankruptcies among Thai businesses who borrowed in dollars, but who earned revenues in Baht.
Thailand's military government took over control following a 2014 coup-d’etat. The government issued a twenty-year economic development plan which sets the goal of reaching developed-economy status by the year 2036.
Thailand’s economic rise has made the Thai Baht (THB) a favorite instrument for foreign exchange (FX) currency traders. It has become an important unit of account for the global economy. As of 2016, the Thai Baht was the 23rd most-traded currency according to the Bank of International Settlements.
Thailand’s economy grew on average by 6.6% between 1950 and 2000, making it one of the best performing economies of the second-half of the 20th century. But, since the Asian financial crisis of 1997, growth has slowed considerably.
The Thai economy expanded at a 5% average annual rate between 1999 and 2005, and GDP growth slowed further to an average annual rate of 3.5%. Between 2005 and 2015. This performance has dramatically reduced poverty in Thailand, from a rate of 67% in 1986 to 7.2% in 2015, and has raised the country to the status of an upper-middle income country, according to the World Bank.
According to World Bank data, Thailand is an upper-middle income economy. However, it still struggles with significant external debt. The country experiences a 2.3% annual inflation rate and has a gross domestic product (GDP) growth of a 3.9%, as of 2016, which is the most current year of available data.