Loy Krathong Parade, Chiang Mai, Northern Thailand. Loy Krathong is held annually on the full moon night of the 12th month in the traditional Thai lunar calendar. In northern Thailand this coincides with the Lanna festival known as Yi Peng. King Mengrai founded the city of Chiang Mai (meaning 'new city') in 1296, and it succeeded Chiang Rai as capital of the Lanna kingdom. Chiang Mai sometimes written as 'Chiengmai' or 'Chiangmai', is the largest and most culturally significant city in northern Thailand.