Vietnam to Bring out More Polymer Notes, Coins

Vietnam to Bring out More Polymer Notes, Coins

Vietnam's central bank will put more polymer banknotes and coins into circulation this year to replace the traditional cotton-based banknotes that are at high risks of being counterfeited.

The polymer notes are expected to make up 90 per cent of banknotes in automated teller machines (ATMs) in Ho Chi Minh City by the Lunar New Year (to last from February 7-10) and 95 per cent of circulating banknotes at the end of 2005, said Ho Huu Hanh, vice director of the Vietnam State Bank’s Ho Chi Minh City branch in a recent Thanh Nien newspaper interview.

Although the central bank introduced polymer banknotes and coins in early 2004, the paper- and cotton-based money is still widely used in Vietnam.

The Vietnamese people have complained a lot about fake paper money, especially VND100,000 bank notes, in circulation. Sometimes, the counterfeit bills can even be found in money withdrawn from banks.

Fake notes flooded the country in late 2003 and early 2004 "at a serious level" one official from the State Treasury said. Some counterfeit notes are so sophisticated that they fool even modern testing machines. However, only the older cotton blend notes are being forged, while the new polymer bills remain well beyond the current capability of forgers.

Even Mr. Hanh admitted, the central bank "may have made mistakes in checking and counting money," resulting in counterfeit money showing up in its banks.

But, bank staffs have to count a huge amount of cash everyday, he explained. They particularly have to count VND100,000 notes manually to detect counterfeits by experience, he added.

To prevent the counterfeit bills, the central bank will try to withdraw cotton-based bills and put more polymer bank notes into circulation, Mr. Hanh said. In addition, Mr. Hanh strongly rejected a recent rumor that the new polymer VND500,000 bank notes were being counterfeited.

Besides, people should use the bank transfer service instead of cash for payment to reduce the risks of counterfeit money or being robbed, he suggested.

As well, more coins will be put into circulation in 2005, Mr. Hanh said. According to him, the production of coins only cost a sixth of what paper bills cost, and coins are also more durable.

In 2005, the central bank will withdraw from circulation paper bills with nominal values of VND2,000 or less, and will step up circulation of coins, the vice director said. Regarding the complaints that coins quickly deformed or stained, Mr. Hanh ensured that coins that satisfy all currency elements are acceptable.

The central bank Ho Chi Minh City branch puts into circulation on average about VND8 billion worth of coins every month, which is half the amount of coins circulating nationwide.

Several local businesses have considered setting up coin-operated vending machines, said Mr. Hanh, adding that the bank had planned supportive measures, including rewards, to these businesses.

(Young People Online)