Economy spurs need for notes
 

VNECONOMY

Source: Vietnam News

02.12.03

New dong denominations are about to hit Vietnamese streets. Le Duc Thuy, governor of the State Bank of Viet Nam, discussed the new money with Tuoi Tre (Youth) newspaper.

Why did the SBV issue the high-denomination VND500,000 (US$32) bill?

Previously, we had cheques valued at VND500,000, VND1 million and VND5 million denominations. But they expired quickly, thus it was costly to issue them, and the SBV stopped issuing these notes last April.

The economy’s demands now require us to have higher-denomination notes, so we decided to issue VND500,000 bills.

Should we be afraid that the money is losing its value?

Absolutely not! Vietnamese money has been rather stable in recent years. I assure you that we’re issuing the VND500,000 note only to meet the demands of our economy. For example, if we didn’t have enough high-denomination cash before Tet (lunar new year), we would have to print a lot of notes.

In the future, will the SBV issue cash with even higher denominations, such as the VND1 million note? We don’t intend to right now, but we could include it in future plans. The biggest denomination is now VND100,000. Soon, it will be VND500,000. Those are equivalent to just $6 and $32, so their values aren’t high.

Why did we choose polymer to print notes? Only 16 other countries use this material for printing currency. Is it very expensive?

We use polymer to prevent counterfeiting. This has been well-recognised in the global community.

Polymer is also suitable for our climate and money-handling habits in Viet Nam. It is hard to tear this paper, and it is water resistant, so the bills will last longer.

The printing cost for polymer notes will be double that of the current paper bills, but the durability will be three times longer.

Will all the new notes be printed in Viet Nam?

Some of the new polymer bills are being printed in Australia so Vietnamese workers have the time to learn the technology.

In future, all the notes will be printed in Viet Nam.

As for the coins, they are made by a European company. But we will establish a workshop for making coins in Viet Nam.

In the past we had used coins, but we stopped in 1985. Why have we decided to use them again?

We stopped using coins because inflation was high at the time. Today, Vietnamese money is fairly stable. Plus, automatic payment services and commerce are common, so using coins is necessary.

Coins last about 10-15 times longer than notes do, too.

How much new money will be put into use? 

 We are printing them as we speak, so I can’t tell you the exact number.

As for the VND50,000 note, we have printed 20 million notes, or VND1 trillion worth.