
Demand for newly printed banknotes has surged in the run-up to the Chinese New Year festival, resulting in a shortage of fresh notes.
Despite Thailand's transition to digital payments, cash remains a necessity for this festive occasion.
Chinese New Year, celebrated this week from Wednesday through Friday, requires ang pao (red envelopes) that symbolise joy, with money stuffed inside.
Although digital payments are surging, many Thais of Chinese descent prefer to give ang pao as physical cash, particularly newly printed banknotes, in keeping with tradition and beliefs.
Consumers are complaining about the shortage of new banknotes, a problem many faced during last year's festival.
Sukunya Boonchuaylur, a 51-year-old entrepreneur running a small business, said she was frustrated by the difficulty in obtaining new banknotes. Despite visiting several bank branches, she was unable to acquire new banknotes due to the shortage.
"Last week, I walked in to a bank branch to acquire new banknotes. A sign at the service counter stated no new banknotes were available. This has been a recurring issue for two consecutive years," said Ms Sukunya.
A few days later, she noticed the branch updated its notice, stating new banknotes would be available from Jan 27.
Budsakorn Teerapunyachai, assistant governor for the payment infrastructure and service group at the Bank of Thailand, said the regulator prepared various denominations of banknotes to meet increased demand during the Chinese New Year festival. The higher cash reserve is also intended to support economic activities driven by government measures.
The central bank also stressed the importance of ensuring an equitable distribution of banknotes to the public, as it expects banks to disburse banknotes worth an estimated 40 billion baht during the festival period.
New print run
Last year the regulator prepared banknotes worth 29 billion baht for the festival.
Wongrawee Suwanmongkol, a 16-year-old student of Chinese descent, expressed a more flexible attitude toward ang pao payments, saying he does not care about the payment method. He said he appreciates both cash in red envelopes and digital payments.
"Last year, I received cash in red envelopes from my grandparents, while my older sister transferred ang pao to me via a mobile banking app. Either way is fine with me," said Mr Wongrawee.
The central bank said it understands consumer demand rises during the festival and it works closely with banks to ensure an adequate supply of banknotes, including newly printed ones.
Roughly 1.3 to 1.7 billion banknotes are printed annually to support economic growth and replace old, deteriorated notes being destroyed.
For this year's festival, the central bank already allocated new banknotes to commercial banks and specialised financial institutions, which are distributing them to branches nationwide.
Going cashless
The regulator continues to promote proper banknote handling practices among the public, advising against folding, tearing, crumpling, writing on, altering, stamping, or stapling banknotes. The goal is to preserve the quality of banknotes in circulation, allowing them to remain in use for a longer period of time. The practice also supports efficient cash management at an appropriate cost, which is one of the regulator's key missions, according to the central bank.
Over the past five years, digital payment transactions in Thailand have grown by an average of 26.2% annually, while cash withdrawals have declined by 3.3% per year.
In terms of deposit amounts, cash withdrawals have decreased by 1.2% per year.
A consumer survey conducted by the central bank in 2023 found the proportion of cash payments to digital payments was 66:34, changing from 87:13 in 2021. As a result, the regulator plans to manage cash in the financial system effectively during the transition to digital payments.
The national digital payment platform PromptPay, which accepts QR code payments, played a major role in encouraging digital payments in Thailand.
As of November 2024, PromptPay registrations tallied 86.8 million accounts, contributing to 71.2 million transactions per day, with a daily transaction value of 147 billion baht, according to the central bank.