20 bahts (King) – Thailand

In 1999, Thailand was in the arduous process of recovery from the 1997 Asian Financial Crisis, which had originated in Bangkok with the collapse of the Thai baht. The currency situation was defined by a managed float regime, adopted in July 1997 after the government was forced to abandon the long-standing peg to the US dollar. This dramatic devaluation, which saw the baht lose over half its value, had left the economy in severe distress, with a banking sector crippled by non-performing loans and a corporate sector burdened by massive foreign-denominated debt.

The year was characterized by fragile stability under the guidance of the International Monetary Fund (IMF). A $17.2 billion IMF bailout package came with strict conditions, including high interest rates to defend the currency and austerity measures to restore fiscal balance. By 1999, these policies, though painful, had succeeded in stabilizing the baht, which traded in a relatively narrow band around 37-40 to the US dollar. This allowed the Bank of Thailand to cautiously begin lowering interest rates to stimulate growth, as the immediate threat of hyper-depreciation and capital flight had subsided.

However, the underlying currency situation remained precarious. The stability was not yet self-sustaining and was heavily reliant on continued IMF support and fragile investor confidence. The devaluation's legacy meant Thailand's economic rebound was export-led, as a weaker baht made goods cheaper abroad, but domestic demand and investment remained weak. The focus for authorities in 1999 was thus on maintaining this hard-won stability while navigating corporate debt restructuring and banking sector reforms to lay the foundation for a more resilient financial system.