Azerbaijan, Baku, April 10 / Trend A. Akhundov /
The Azerbaijani Central Bank (CBA) does not intend to cancel a commission of 0.3 per cent which has been applied for commercial banks in the case of CBA cash deliveries of 100 manat banknotes since Feb. 1, 2013.
CBA chairman Elman Rustamov told media today that introducing the commission in respect of 100 manat banknotes is not a temporary measure.
"This decision showed its effectiveness," he said. "We see changes in the money supply and continue working in this direction. Earlier, 100 manat banknotes forced out other banknotes, whilst now its market share decreased by increasing the share of small denomination banknotes. Metal coins also increased their share."
This simplifies the cash flow and the use of certain services by the population.
The Central Bank has introduced a commission to optimise the nominal structure of banknotes, to reduce the use of cash payments in calculations and to promote the use of cashless payment systems.
According to CBA, the share of 100 manat banknotes in circulation has reached 75 percent over the past seven years, exceeding internationally accepted standards.
"Several business processes in the field of cash in international practice in many countries (storage, transportation and processing of banknotes) have been delivered by central banks to the private sector and related services are rendered to commercial banks for a fee," the CBA said earlier. "However, no fee was taken for services related to cash at the Azerbaijani Central Bank."
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 0,7846 AZN/USD on April 10.