S. Korea’s highest banknote is coming back to circulation

2017.05.04 13:32:34 | 2017.05.04 13:33:05

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South Korea’s 50,000 won ($44.23) banknotes are circulating again after dire shortage that had led to concerns about the highest value bills being stashed away in the underground economy.

The Bank of Korea said Wednesday that it floated about 6.96 trillion won in 50,000 won bills during the January-March period of this year and retrieved 4.59 trillion won, redeeming 66.0 percent of the issues. That is up 8.5 percentage points from three months ago (57.5 percent) and the highest level since the fourth quarter of 2012 when the figure was 86.7 percent.

The 50,000 note was first issued in July 2009 and the central bank`s collection of rate of it kept rising until the end of 2012. But from 2013 to 2015, more than half of the issues did not return, making the central bank to print extra to meet market demand.

As a result, the outstanding balance of 50,000 won bills surpassed 50 trillion won in November 2014, 60 trillion won in September 2015 and 70 trillion won in July 2016.

Since 2015, the central bank has encouraged commercial banks to redeem 50,000 won bills by allocating more of newly issued 10,000 bills to them.

The notes are returning faster to banks amid rises in interest rates. The draconian anti-graft law also made people pay in cash instead of corporate credit cards, the central bank said.

By Kim Gyu-sik

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