|
Merit making activities damage banknotes: Central bank
The Bank of the Lao PDR (BOL) is calling on the public to change the way they use banknotes in traditional merit-making activities, saying the damage caused to notes results in extra expenditure to print new ones.
The central bank has asked media outlets to raise public awareness of the problem after large numbers of banknotes have been damaged during major annual festivals when people donate money to monks at temples.
During the festivities, it is customary for people to weave banknotes together and shape them into flowers before placing them on ‘money trees'. This shortens the life of banknotes and forces the bank to shoulder extra costs in printing more.
Bank officials say they would prefer merit makers to put money in plastic bags before hanging them on money trees as this would help to preserve the notes.
“No survey has been done to discover how much damage is done to banknotes in this manner but we are certain that these traditional practices are causing significant damage to banknotes,” said an official at the BOL's Banking Operations Department.
He also said it would be preferable if people didn't use small denomination banknotes on money trees but used larger bills instead as this would help the central bank and the country to save on the cost of printing new notes.
“It costs the same to print a 1,000 kip note as it does to print a 50,000 kip note,” the official said.
He pointed out that people could give the same amount of money to monks by donating large denomination banknotes so there was no logical reason for merit makers to stick with tradition.
BOL officials say they believe that most small denomination banknotes are not in circulation as monks don't spend them because they don't need to go to markets and shops to buy food and other goods.
They say the central bank put a large number of small denomination banknotes in circulation to make it easier for people to spend their small change on low-priced items and so keep the inflation rate in check. But because so many of these banknotes are used in merit-making, their circulation is reduced.
BOL officials say the problem of the short supply of small denomination banknotes could not be addressed if people don't change the way they donate money to monks.
Officials said they would like banknotes to be kept in better condition, as this would prolong their time in circulation and help the government save money on printing new notes.
vientiane times
|
