Vietnam introduces new 500,000 Dong bank note

Reuters

27.11.03

5:33 AM ET

HANOI, Nov 27 (Reuters) - In an effort to foil counterfeiters and promote the use of vending machines, Vietnam said on Thursday it will introduce a 500,000 Dong ($32) currency note, redesign its 50,000 dong note and mint three types of coins.

Central bank governor Le Duc Thuy said in a hastily called news conference in response to what he called misinformation from "bad willed" Vietnamese living in America that the new notes would be circulated from December 17.

In the last few days, "reactionary" groups have spread reports on the Internet about a change in Vietnam's currency, Thuy said, adding: "They called on people to stockpile goods."

Vietnam decided on the changes "to make the money structure more reasonable and to better fight against counterfeits", Thuy said. He also said the new Australian-made polymer-based notes were more durable, dipping one specimen into a glass of water to demonstrate.

"People selling vegetables and fish in the market will be very happy with this money," he said to laughter.

Vietnam's largest denomination bank note in present use is 100,000 dong, and was issued in 2000.

Coins were used until the early 1980s, before Vietnam's "doi moi" economic renovation of 1986 that shifted the Southeast Asian country from a centrally planned to a market economy with socialist influences.

The coins were abandoned after they became virtually worthless as the country was wracked by inflation. Annual inflation is now around 2.5 percent.

But now boasting the fastest growing economy in Southeast Asia, Vietnam is ready to reintroduce the coins, which Thuy said would be useful for buying vending machine products like cigarettes and soft drinks.

The 500,000 dong ($32) notes, which are greenish blue, have a portrait of the country's first president Ho Chi Minh on the front, and shows his Kim Lien commune home on the other side.

The redesigned 50,000 dong notes, which will be used alongside the current green 50,000 dong currency, are light brown and depict Vietnam's old citadel of Hue.

Both notes have 15 security features, including a watermark, colourless printing visible only in ultraviolet light and numerals that can be seen only when the currency is held level.

Thuy said reporters should make clear the old notes were still legal tender.

World Bank Vietnam country director Klaus Rohland applauded the change. The 500,000 dong note "is long overdue in my mind", he told Reuters.

"It's staggering how you have to run around with tonnes of money in your pocket," he said, noting that many transactions in the country are settled in cash.

($1=15,595 dong)