News in Brief

India Inaugurates New Banknote Lines

As part of its modernisation programme, Security Printing and Minting Corporation of India Limited (SPMCIL) has commissioned new banknote printing lines at both of its printworks - Currency Note Press, Nashik and Bank Note Press, Dewas.

The contract for equipment was split between Koenig & Bauer Banknote Solutions and Komori. The new equipment include offset, intaglio, number and finishing equipment, both to replace and supplement existing lines.

The virtual inauguration of the new lines at Nashik was undertaken by Smt Sheera Swarup, Special Secretary and Financial Adviser at the Ministry of Finance (which owns SPMCIL) and at Dewas by Sh Shashank Saksena, Senior Economic Advise in the Ministry’s Department of Economic Affairs in front of MPs and senior executives of SPMCIL.

SPMCIL produces c. 40% of India’s banknotes (the rest is produced by Bharatiya Reserve Bank Mudran, which is owned by the Reserve Bank of India). In 2020/21 it produced 8.2 billion notes, down by 15% over the previous year.

Latest Steps in Liberia’s Currency Reform

The Central Bank of Liberia (CBL) and commercial banks have signed an MOU committing the parties to closely coordinate in implementing CBL’s Currency Changeover Plan.

The CBL will regularly share information with commercial banks in the replacement of legacy and enhanced banknotes to ensure a smooth, gradual and transparent exercise and will also lead the way in public education. Commercial banks, their agents, including credit unions, foreign exchange bureaus and microfinance institutions will undertake the currency exchange process across the country. The MOU requires that commercial banks will stop paying out mutilated banknotes once the replacement of such banknotes begins.

CBL and the commercial banks agreed to meet periodically and share information regarding the progress and challenges in the currency exchange exercise.

The MoU is part of the High-Level Currency Changeover Implementation Plan, approved by the CBL Board of Governors as a requirement under the Extended Credit Facility (ECF) program with the International Monetary Fund (IMF). The first two batches of new L$100 notes – amounting to 800,000 – have already arrived.

As part of the changeover, in January the CBL incinerated half a billion banknotes. The open-air burning was open to the public in order to increase transparency and confidence in the currency reform programme, with the CBL stating that it took place with ‘adherence to the environmental standards of the country’.

Estonia Considers Coin Rounding

Estonia is the latest member of the eurozone to consider dispensing with the two lowest value euro coins, given that 40% of the coins returned to the Eesti Pank are in these denominations.

Finland and the Netherlands were the first two countries to apply rounding rules and stop issuing 1 and 2 euro cent coins. Belgium, Ireland and Italy have followed suit. Slovakia is likely to join them this summer.

Rounding rules could well be applied throughout the eurozone. The European Commission undertook a public consultation on the future of the 1 and 2 cent coins at the end of 2020. The European Central Bank is currently drafting legislation on rounding that is likely to be published later this year.

Moneygram Finds a Buyer

MoneyGram International, which describes itself as a global leader in the evolution of digital P2P payments but is best known for physical money transfer, is to be acquired by Madison Dearborn Partners (MDP), a Chicago-based private equity firm, in a deal worth $1.8 billion.

Moneygram, which prior to the pandemic had an international network of 380,000 retail locations, has effectively been on the market for five years or so, after a $1.2 billion bid by China’s Ant Financial in 2017 was rejected by the Committee on Foreign Investment in the US on national security grounds. Its main rival Western Union was also reported to have made a bid in 2020.

Moneygram, like Western Union, has struggled in recent years to compete with a host of younger, all-digital payment companies. According to its CEO, Alex Holmes, ‘by partnering with MDP and becoming a private company, we will have greater opportunities to innovate and transform MoneyGram to lead the industry in cross-border payment technology and deliver a more expansive set of digital offerings, while leveraging our global platform for new customers and use cases’.

Request for Higher Denominations in Argentina

Representatives from the Argentinian Parliament have presented a request to the Executive Branch and the Central Bank to issue notes from 2,000 to 20,000 pesos in order to save $300-400 million in production, storage and logistical costs.

The current highest note, the 1,000 peso, went into circulation in December 2017, when its value was equivalent to $57. At the end of January, it was worth just over $4.

Egypt Looks to Expand in Coin Production

Egypt’s Finance Minister has announced a deepening cooperation with the UK’s Royal Mint in coin technology production. According to the Minister, Egypt is seeking to maximise the capabilities of the Egyptian Mint, as one of only two such facilities in Africa and the Middle East, to cover the needs of domestic and regional markets.

Local reports state that a project is under discussion with the Royal Mint, a long-time supplier to Egypt, to produce coins with local components through a new factory or production line in the Suez Canal axis, with the aim of pumping new investments and exporting to Africa and the Middle East.

This cooperation forms part of a broader strategy to support national industries and stimulate economic activity, and comes on the heels of the country’s new printworks, which has recently been completed.