The National Bank of Hungary has started to gradually replace all of the banknotes in circulation. The first in line will be the 10,000 note which will be on the streets already in December. The replacement of the banknotes will last until 2018 and cost net HUF 15-20 billion. Although comparison is virtually impossible, the introduction of new banknotes in the 1990s cost the state about net HUF 3 billion. We should also note that 60% of the current expenditure would have arisen in any case therefore the move will cost “only" about HUF 6-8 bn more. The new banknotes will have more security features to make forgery more difficult, although losses related to counterfeit notes have been negligible already. What is more important is that printing will be less costly and so the gradual replacement of the banknotes will also cost less. The new banknotes are expected to remain in circulation for another one or two decades.
The replacement of the banknotes will cost the state net HUF 15-20 billion in the 2014-2018 period. MNB expert and director of cash logistics Anikó Bódi-Schubert told Portfolio that 60-70% of this cost would have come up anyway due to amortisation, therefore the replacement means HUF 6-8 bn extra cost.
Ferenc Gerhard, member of the rate-setting Monetary Council, told a press conference that there is still no official target date for Hungary’s accession to the euro area therefore the replacement of the banknotes had to be started in any case.
Another MNB official said counterfeit money cost losses of about HUF 30 million in total over the past few years, which is negligible on a national economy level.
The “top-of-the-line" new 10,000 forint banknote was created with a triple aim in mind: (i) to prevent forgery, (ii) to prevent amortisation and (iii) to lower production costs.
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