BoT urges usage of older banknotes for special occasions

The Bank of Thailand (BoT) urged consumers to use existing banknotes for special occasions instead of requesting newly printed ones. This request comes as the circulation period of banknotes has extended due to the rise in digital payments and improved banknote quality.

Currently, the first-in, first-out cycle for banknotes means they stay in circulation about 10% longer than before. The higher durability and reduced damage rate of notes have contributed to this extended usage period.

In the past, there were complaints about the shortage of new banknotes for Ang Pao, or red envelopes, used during the Chinese New Year festival. To address this, the BoT‘s Assistant Governor, Somboon Chitphentom is promoting a shift in consumer behaviour.

“The central bank expects consumers to gradually change their behaviour regarding the use of cash for special occasions by using existing banknotes that are in good condition instead of demanding newly printed ones.”

Traditionally, newly printed notes are preferred for Ang Pao payments and wedding ceremonies, especially 1,000-baht notes. However, Somboon emphasised that this preference can change. The 1,000-baht notes, being more durable, remain in circulation longer compared to lower denominations like 20-baht and 100-baht notes.

Somboon explained that the central bank’s production of new banknotes is based on actual consumer demand. Although the annual production of new notes continues, the growth rate has slowed due to the increasing use of digital payments. The current growth rate for new banknote production is 2 to 3% per year, down from 6 to 7% in the past.

The production costs for new banknotes have risen due to advanced anti-counterfeiting technology and the higher-quality materials needed for longer-lasting notes. The raw materials, including paper and ink, are imported.

Additionally, the central bank has shifted gears and started producing 20-baht banknotes with polymer materials, enhancing their quality and durability, reported Bangkok Post.