Too Many Coins to Handle in Thailand|
August 27, 2013
The “Around the World” column regularly covers complaints of insufficient coins in circulation somewhere in the world. This time it's different. Vending machine operators in Thailand are complaining about too many coins!
Recharging mobile telephone accounts through vending machines that accept coins is big business in Thailand. In the past the coins could be exchanged for larger denomination bank notes at the provincial offices of the comptroller general anywhere in the country. Recently vending machine owners in the 12 upper northeastern provinces were told they must now exchange their coins in the city of Khon Kaen, which is creating a logistical problem for them.
The Government Savings Bank in each province still redeem coins for bank notes, however these transactions are limited to 5,000 baht (about $161 U.S.) per person.
Kittisak Komolsiriwattana is the advisory chairman of Udon Phone Techno Partnership Ltd. and the representative for the local Khon Kaen region vending machine operators. He was quoted in the July 11 Bangkok Post newspaper as saying, “The problem is the Khon Kaen office does not have sufficient cash reserves, so it has set a quota for vending machines, limiting each operator to 1 million baht a week. The remaining coins cannot be exchanged into bank notes.”
Kittisak said he takes about 5 million baht to the office regularly, however he has had to take back 4 million baht each time.
Kittisak has hired a truck to transport the surplus coins to the Royal Thai Mint in Bangkok, where they can still be redeemed. According to Kittisak, this amounts to between 16 and 20 million baht (about $500,000 to $620,000 U.S.) monthly.
Although shipping the coins directly to the mint solves the problem in one sense, there are additional costs involved. There are transportation and security expenses that otherwise wouldn’t be incurred. In addition, vending machine operators lose about 10 percent of the face value of what they ship due to the mint discounting what it is willing to pay for damaged coins.
Kittisak told Bangkok Post, “Operators have never complained about not getting the full value, as they think of the deducted money as a contribution to the government budget, for spending on the country’s development.”
What the vendors do complain about is that they have to truck tons of coins to the mint rather than redeem them locally. Kittisak said, “Vending machine operators could tolerate the current situation, but were worried about possible problems in terms of accident or robbery while they are transporting the money to Bangkok.”
The provincial comptroller general’s office told Kittisak the problems stem from them having a staff shortage, concern that the 100 million baht in bank notes on hand isn’t sufficient for distribution purposes, and that the office has a shortage of coin sorting machines. Although, according to Kittisak, the comptroller general’s office told him they have requested extra staff at the time this article was being written no increase in staff had taken place.
The exchange rate on Thailand’s currency is currently about 31 baht to the U.S. dollar. Thailand’s circulating coinage consists of 1-, 5-, 10-, 25-, 50-satang and 1-, 2-, 5-, and 10-baht coins. Thailand’s bank notes are available in 20-, 50-, 100-, 500-, and 1,000-baht denominations issued throughout Thailand’s 15th series and 16th series.
The 16th bank note series was introduced beginning in 2010. There is also an 80-baht bank note issued in 2012 to mark Queen Sirikit’s 80th birthday. Not all of these coins and notes are in common use, especially the lower denomination satang coins.
The current coin series was introduced in 2009. Due to the cost of manufacturing and raw materials the composition of the coins was changed at this time (The portrait of the king was also updated). Among the changes was altering the composition of the 2-baht coin from nickel-clad steel to aluminum-bronze. The previous 2 baht was too similar to and often confused with the 1-baht coin.
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• See what guides and supplies our editors recommend for keeping up with your collection.
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