Thailand has been a member of the International Monetary Fund (IMF) since
1949
, but
did not fix an initial par value for the Baht, because at that time the economic situation had not
yet stabilized. On October
20, 1963
the Royal Decree was promulgated establishing par value of
the Baht. It provided that the par value for one Baht should be
0.0427245
gramme of fine gold and
giving it an exchange rate of Baht
20.80
to one U.S. dollar. And thereafter Thailand had adjusted
the par value for the Baht for many times. The exchange rate system had been adjusted as of
November
2, 1984
by pegging the value of the Baht to other currencies of Thailand’s major trade
partner countries, Later the Ministry
of
Finance issued notification on “Change of Foreign
Exchange Rate System” from the “basket of currencies” to a “managed float” as enforcing as of
July
2, 1997
. The foreign exchange system shall be such that the value of the Baht is set by
conditions in foreign exchange markets.
The international monetary of Thailand was based on the International Monetary Fund.
The Second Amendment of the Articles of the Agreement of the IMF on April
1, 1978
stresses the
importance of internal economic stability as a precondition for exchange rate stability. Apart from
greater flexibility in the exchange rate system, the role of gold and the reserve currencies was
reduced by promoting the Special Drawing Rights (SDRs) as the main reserve assets in the IMF.
In maintaining the stability of the exchange rate, the government earmarks the Exchange
Equalization Fund at the Bank of Thailand to determine the exchange rate.
Credit system is very important for the economy of the developing countries. The aim of
the system is to promote savings and to find the best means that give the most benefits derived
from investment. It is necessary to improve the financial institutions which are the financial
intermediaries.
The financial institutions in Thailand are commercial banks, finance companies, finance
and securities companies, the Government Savings Bank, life insurance companies, the Bank
