bne IntelliNews – Albania introduces new high value banknote as demand for cash increases
For the first time, the Bank of Albania is putting into circulation a 10,000 ALL banknote, worth a little over € 80.
The demand for liquidity has increased as the economy grows, while banking penetration is relatively low. Since the start of the pandemic, demand has increased further.
The ALL10,000 banknote is part of a new series of banknotes introduced between 2019 and 2022. It is twice the value of the ALL5,000 banknote, previously the highest denomination in circulation in Albania.
The note has the symbols of the Albanian flag and the national anthem and a portrait of Aleksandër Stavre Drenova, also known as Asdreni, the author of the national anthem. It will be legal tender from June 31.
It is being put into circulation at a time of low and steady inflation that has persisted for several years, including throughout the economic turmoil of the coronavirus crisis. This prompted the supervisory board of the Bank of Albania to keep the base rate at an all-time high of 0.5%.
According to the International Monetary Fund (IMF), inflation has increased slightly in recent months, driven by rising international commodity prices, but remains well below target. The central bank expects inflation to gradually return to its 3% target in 2022 as the economy emerges from the crisis and economic activity normalizes.
The governor of the central bank, Gent Sejko, said on June 15 that the new banknote was necessary because the Albanian economy has grown, but that it remains largely cash-based, despite the gradual increase in banking penetration.
“This highest face value banknote supports the economic development of the country and, according to all analyzes, meets the market requirements to have it in the structure of our series of legal exchange rate banknotes,” Sejko said during of the presentation of the new ALL10,000 and ALL1,000 banknotes, the last to be put into circulation.
“Its introduction and circulation will allow a better and more efficient circulation of cash, helping the structure of the currency in circulation, reducing the costs of production, storage and distribution, and thus increasing the efficiency of the Bank of Albania in the administration of physical currency. and the problems, ”he added.
“Despite the development of other means of payment, such as. electronic money, currency in circulation continues to have an increasing trend over the years, reflecting the economy’s continued demand for physical money as a means of payment. The Bank of Albania carefully plans to ensure that this market demand is met, both in normal and atypical situations. “
Sejko noted that during the pandemic, there had been an increase in demand for cash; in 2020, the currency in circulation increased by around Gll 52 billion, which is roughly three times the growth recorded in 2019. This continued into the first five months of 2021, when there was an increase of about 10 billion ALL.
The Bank of Albania decided in 2016 to launch the new series of banknotes and had already put into circulation the ALL200 and ALL5,000 denominations in September 2019. In addition to adding a new denomination, the new banknotes are of better quality than previous posts, with new security features and the design has been refreshed.
According to De La Rue, who printed the banknotes, the new series of banknotes are the first polymer banknotes in Albania.
The Bank of Albania is continuing its work to complete the series with the last two banknotes, the ALL500 and ALL2,000, which are in production.