Uzbekistan to withdraw paper notes of 100, 200, 500 soums from circulation
Baku, Azerbaijan, February 22
By Fakhri Vakilov - Trend:
Paper bills of 100, 200 and 500 soums will be gradually withdrawn from circulation in Uzbekistan, reports Trend via Uzbek media.
This was announced during a special seminar on the introduction of new 100,000 bills that was held in the capital.
Fazliddin Bozorov, director of the Central Bank's money circulation department, noted in his speech that issuing banknotes with a face value of 100,000 soums solves problems, primarily related to inconveniences when people buy high-value goods such as cars, furniture, and household appliances. Thus, the first task of issuing a new banknote is a convenience in cash settlements.
Moreover, the load on cashiers and employees of commercial banks who calculating small bills will be reduced, the issuance of wages, pensions and benefits will be simplified. The cost of issue (printing) of cash, as well as their transportation and storage will be significantly reduced too. The efficiency of servicing the population through ATMs will also increase.
Banknotes of 1,000 soums were issued in 2001, and the release of the 5000 banknote was carried out only in 2013. Prices are rising over the years, so there is a need to facilitate the process of money circulation by reducing the number of banknotes.
In recent years, the national currency has lost its savings function, so the issue of 100,000 soums in denomination will also help restore this function, because it is much more convenient to store these bills.
Fears that the release of large bills contributes to inflation is not justified, because the total money supply in circulation does not change, only the structure of the money supply changes. Small bills of 100, 200 and 500 soums will be gradually withdrawn from circulation and replaced with coins.
Two groups of factors affect inflationary processes: monetary and non-monetary. Nowadays, inflationary processes are a natural phenomenon due to the liberalization of the economy, reforming the financial, fiscal spheres, the implementation of reforms. However, all of these are non-monetary factors, so inflation will not increase with the release of a new note.
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