Azerbaijani Central Bank refuses to issue high denomination banknotes in 2013 (UPDATE)
The details were added (the first version was posted at 11:24)
Azerbaijan, Baku, Feb. 26 / Trend E. Ismayilov, H. Valiyev /
The Azerbaijani Central Bank (CBA) has postponed issuing new banknotes of a high denomination for the period after 2013, chairman of the Azerbaijani Central Bank (CBA) Elman Rustamov told media today.
"Several years are required to implement this project," Rustamov said. "There is no decision to issue high denomination banknotes. There is still just a proposal and its realisation is possible after 2013."
Rustamov said earlier that the share of high denomination banknotes of 50 and 100 manat in circulation has recently increased. This is a large financial burden for the state. According to international practice, their share must not exceed 60-65 per cent.
According to CBA calculations, issuing new banknotes of high denominations of 200 and 500 manat for the next five years will save up to 10 million euro.
According to the international structure, seven or eight banknotes and coins in the same amount may be issued. Today, six coins and six banknotes are in circulation. After a certain period of time when the country will need to remove coins of low denomination from circulation, then it will be required to regulate the structure of banknotes (if there are higher banknotes in circulation). In this case, it will be possible to issue high denomination coins. For example, there are metal coins of one and two euro in Europe, one and five Swiss francs in Switzerland.
The decision on choosing the coin denomination depends on the structure of the economy of each country, as well as the scale of prices.
The research carried out by the Central Bank has also shown that the scale of prices in Azerbaijan is at such a level that the need for metal coins will still be maintained and widely used in shopping centres.
As a result of the currency denomination, a full transition to the new scale of prices occurred in 2007, held by the CBA in Azerbaijan, old banknotes were fully replaced by new ones Since 2007, Azerbaijan has been using only new banknotes as a means of payment
This allowed prevention of difficulties that might arise among trade and economic entities in connection with the circulation of banknotes of 19 denominations.
The total volume of the order of new currency was 1.7 billion manat given the stock for three years. Some 94 per cent of the total amount falls to banknotes (1, 5, 10, 20, 50 and 100 manat) and six per cent to metal coins (1, 3, 5, 10, 20 and 50 kopecks).
The operating period of banknotes is up to five years and coins, 20 years.
Today, much load falls to the banknotes of one and five manat. Their life cycle is up to two years as they are damaged due to frequent use. Therefore, the CBA is considering an opportunity of issuing metal coins of high denomination to reduce the burden on them and reduce the costs.
The official exchange rate is 0, 7849 AZN/USD on Feb. 26.