Coin use signals tough times
Economists and business leaders joke that Mama instant noodles can be as reliable a
gauge as any for economic trends - when times are bad, people cut back spending
in favour of a classic, cheap Thai comfort food.
The Treasury Department, however, prefers a different proxy for consumer
confidence. Officials say data on coin use show an increase in 10-baht coins in
the market, signifying that people are breaking into their piggy banks and
small savings in search of money for everyday spending.
Coin exchanges for banknotes have nearly doubled in recent months, with 7-8 million coins returned to the
Treasury Department per month compared with 3-4 million in more ordinary
economic times.
"People are bringing out their coin savings for everyday use, a sign of the troubling times," said
one treasury official.
"Normally, people will throw their small change into a drawer or
put it in a coin bank without a second thought. That we're seeing more use and
coin exchanges shows how hard times are right now."
The Bank of Thailand on Friday cut its economic forecast for 2009 to a
contraction ranging from 3% to 4.5% from last year, citing worse-than-expected
economic data for the first quarter, when the economy contracted by 7.1% from a
year earlier.
In any case, the fact that more coins are returning to the Treasury
Department is good news for officials, as it cuts back the need to produce new
coins for the overall economy.
The increase in copper and metal
prices in recent months has cut returns for the Treasury Department for
minting new coins.
Yet consumer behaviour has not changed entirely. While 10-baht coins are
seeing greater use in the market, use of the smallest denomination coins of 25
and 50 satang remains relatively low. Of the 10 million 25- and 50-satang coins
pushed into the market each month by the Treasury Department, only one million
come back for exchange.
According to the department, 17 billion coins are in circulation in the
economy at any given time, with one-baht coins representing as much as 70% of
the total coins outstanding.
One official said the Treasury Department had held discussions with the
Bank of Thailand about introducing a 20-baht coin to substitute for 20-baht
banknotes. Coins typically have a lifespan of 10 years in circulation,
significantly longer than more fragile banknotes.
Source: bangkokpost.com