KATHMANDU, Oct 10: The pressure for currency exchange has significantly reduced this year as Nepal Rastra Bank (NRB) did not print new notes targeting the Dashain and Tihar festivals.
Last year, the central bank exchanged Rs 14.5 billion worth of new notes in the Kathmandu Valley alone and Rs 29 billion nationwide. This year, it has been limited to around Rs 4 billion rupees, which is a reduction of nearly Rs 25 billion.
According to Basudev Bhattarai, Director of the Currency Management Department at Nepal Rastra Bank, it is estimated that around Rs 2 billion worth of notes have been exchanged through the bank's offices, with a similar amount exchanged through other banks.
With no new notes printed this year, the expenses associated with printing were saved and the bank also avoided the hassle of managing additional manpower for currency exchange. According to him, last year, nearly Rs 1.5 billion were spent solely on printing new notes.
NRB to provide clean notes instead of new banknotes for Dashain
“There are 6.6 million households across the country. Even if 50 percent, or 3.3 million households, do not have access to new note exchanges, it costs up to Rs 6 billion to print notes of various denominations for the other half," he said.
This year, instead of printing new notes, the bank emphasized the use of clean and crisp notes that are already in circulation. In line with this policy, clean notes currently in circulation are being used during this year’s Dashain, Tihar and other festivals.
New notes are in high demand only during festivals like Dashain and Tihar, after which they accumulate in the bank's vaults. To make better use of these stored notes and avoid unnecessary spending on printing new ones, NRB has encouraged the use of clean notes already in circulation.
Director Bhattarai stated that every year, new notes are printed during festivals and then end up accumulating in the bank's vaults. As this cycle has continued to increase, the bank decided this year to make the best possible use of those notes already in circulation.
He mentioned that old notes naturally get damaged due to pressure and moisture. Therefore, the bank decided not to print new notes this time, aiming to use the clean notes already in circulation as much as possible.
With the NRB emphasizing the use of notes already in circulation, it is expected that the pressure for currency exchange will decrease and potential unnecessary expenses related to new notes will also be reduced to some extent in the days ahead.
He argued that there are currently three times more notes in circulation and in bank vaults than were printed last year, which is why new notes were not needed. He stated, “Whether they are new or old, the value and significance of the notes remain the same. The government should not impose additional financial burdens simply for new notes,” he said.
Emphasizing the need to continue using clean and crisp notes, he expressed confidence that next year there will be an even greater availability of crisp notes compared to those currently in circulation.
