Exactly like the British pound sterling in ancient times, the Thai baht (Thai: บาท) was originally used as a unit of weight or mass. Specifically, 1 baht was equal in value to 15 grammes of silver. The baht is still used today as a unit or measure of weight for other precious metals, like gold. The baht is based on the decimal system with 1 baht equaling 100 satang. Originally known to foreigners as the tical, this was the term written on banknotes until 1925 and then discontinued.
It is interesting to note that the Thai baht is considered one of the oldest currencies still in circulation. It was Sukhothai (1250-1419) that first used a baht based currency. Numismatists (coin experts) have stated that the term baht first appeared in 1384 on Thai inscriptions in describing a unit of weight. The word itself is derived from the Khmer weight system. As all coins are based on a standardised grading system using simple fractions and multiples, the baht is no exception. Originally it used 1, 2, 4, 8, 16, etc., and 1/2, 1/4, 1/8, 1/16, 1/32, 1/64, etc., as a denomination system in previous times. In the beginning, all baht coins were composed of solid silver at some designated value. The original weight of the baht was determined to be = 768 rice grains.
Originally coins from Sukhothai and Ayutthaya were shaped like heavy bracelets. These were called “pot duang”. They consisted of heavy silver bars that were thicker in the middle and then bent inwards on the smaller tapered ends to meet to form a ring shape; then identifying marks were stamped on them to show denomination. “Pot duang” also came in smaller denominations or smaller sizes. When the first Europeans arrived in Ayutthaya they called them as “bullet money” as the coinage looked exactly like a western folded bullet or ball from a musket.
Thailand was chronically short of coinage for centuries until coin minting was started in 1860. When westerners started coming to Thailand in greater numbers in the early 19th century they brought their own money and coins along. In order to increase the coinage in circulation, the Thai government counter stamped certain large foreign trade coins to certify their validity so they could be used as legal tender in the kingdom between 1858-1860. Many types of metal, glass and porcelain gambling tokens of all sizes were also used as small coins due to their ease of manufacture.
King Rama III (1824-1851) was the first to consider using flat coins. Among other coins and tokens that were used as currency in the kingdom, cowrie shells were also a form of money from ancient times for the smallest monetary units. Before 1860, no coins were manufactured by modern methods. But the King wanted to replace cowrie shells. Not due to their great inconvenience; i.e.; many hundreds or even thousands of them had to be counted to do any business exchange or trade, but he was disturbed that that the little creatures living inside were killed to get their shells. In 1835, the King heard flat copper coins being used in Singapore. He had a Scottish trader make two prototypes. But both designs were rejected. Interestingly enough, the name of the country listed on the coins was “Muang Thai” and not Siam. In 1857, the silver bullet coin, or “pot duang,” finally ended production.
The first royal mint was established in 1860 inside the Grand Palace when a coin minting press arrived from the UK. The first modern coins were struck that year under the direction of King Mongkut (King Rama IV). In 1875, because of a lack of space and a larger demand for coins the mint was moved elsewhere. One gold baht was approximately worth 16 silver baht. Copper, silver and gold baht coins were introduced in various denominations. Smaller coins in fractions or denominations of the baht were called by different names like att, solot and fuang. In 1897, the decimal system was introduced where 100 satang equaled 1 baht. This system was devised and introduced by Prince Jayanta Mongkol, a half brother of King Chulalongkorn (King Rama V). The first coins denominated in baht were issue that same year in 2½, 5, 10 and 20 satang valuations. Other fractional coins of different names were slowly discontinued.
The baht was fixed at a rate of 1 baht = 15 grammes of pure silver until 27 November 1902. Then the Thai government started to increase the value of the baht. It allowed all increases in the value of silver against gold but did not reduce it when silver prices fell. The Thai government first valued 21.75 baht = 1 British pound sterling. It steadily rose in value until 1908 when the baht was pegged or fix at 13 baht = 1 British pound sterling. This was adjusted down to 12 baht in 1919 after World War I ended and again in 1923 to 11 baht after post-war financial instability. The exchange rate range over a period of approximately 20 years fluctuated between 11 baht and 22 equaled 1 British pound.
In 1941, a series of silver coins were introduced that included 5, 10 and 20 satang denominations. This was due to a great shortage of nickel caused by World War II. On 22 April 1942, the baht was fixed at 1 baht equaled 1Japanese yen during WWII. Also in 1942, tin coins were introduced for the 1, 5 and 10 satang denominations. In 1945, a new tin 20 satang coin was introduced followed by new tin 25 and 50 satang coins in 1946. In 1950, a new series of aluminium bronze coins were issued in the 5, 10, 25 and 50 satang denominations. A bronze 5 and 10 satang coins were introduced in 1957 along with a highly unusual 1 baht coin composed of a copper, nickel, silver and zinc alloy.
In an unusual move, to save money on expensive new coin dies, several Thai coins continued to be issued for many years without date changes. For example, the tin 1 satang coin of 1942 and the 5 and 10 aluminium bronze coins of 1950 were struck every year until 1973. The tin 25 satang coin of 1946 continued to be struck until 1964; the tin 50 satang coin was issued until 1957. The 1957 aluminium bronze series of the 5, 10, 25 and 50 satang coins were minted with the same original date into the 1970s. Cupro-nickel 1 baht coins were introduced in 1962, but they remained without a date change until 1982 while being minted every year.
For many years, 1, 5 and 10 baht paper currency notes were issued. These were slowly phased out and replaced by coins since they lasted much longer in circulation than paper bills. In 1972, a cupro-nickel 5 baht coin was introduced. This was changed to a cupro-nickel-clad coin in 1977. During the period 1986-1988, a new coin series was introduced as Thailand modernised their coinage. There were aluminium 1,5 and 10 satang coins, an aluminium-bronze 25 and 50 satang coins, a cupro-nickel 1 baht coins, a copper core, cupro-nickel-clad 5 baht coin and a bi-metallic 10 baht. In 2005, a steel core, cupro-nickel-clad 2 baht coins was introduced.
In 2009, several design changes were made, and new coins were issued. This was to reduce production costs and update the portrait of King Rama IX on the observe (or front) to a more recent likeness. The 2 baht coin, which was very similar in size and colour to the 1 baht coin and was very confusing to consumers and merchants, was changed in colour and size from a carbon steel nickel clad coin to an aluminium bronze coin that was gold colour. It was released on 3rd February 2009. A new 50 satang coin was released that April, a new 5 baht coin was released that May, a new 10 baht coin was released that June and a new 1 baht coin was released that same July.
From 1956 until 1973, the baht was pegged to the U.S. dollar at a steady or set exchange rate of 20.8 baht equaled 1 U.S. dollar. That changed in 1973 when the baht was valued at 20 baht equaled 1 U.S. dollar and lasted until 1978. The baht was revalued at 25 baht equaled 1 U.S. dollar from 1984 to 02 July 1997 when the Asian financial forcefully struck and Thailand’s economy badly faltered. The Thai government was forced to uncouple the fixed exchange rate allowed the baht to float freely. It reached a high point of 56 baht equaled 1 U.S. dollar in January 1998. Since then, the baht has slowly regained its strength and has recovered to about 31 baht equaled 1 U.S. dollar in April 2021.
It is most probable that eventually electronic payment systems will supersede coins and currency in Thailand, but the baht will definitely continue