Author Topic: Egypt: New notes series, will 5 pounds be coinised?  (Read 157 times)

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Offline Pabitra

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Egypt: New notes series, will 5 pounds be coinised?
« on: September 12, 2020, 03:24:26 PM »
Egypt has announced new series of notes with polymer substrate. The denominations are 10 and 20 Pounds. 5 Pounds has been skipped. Does it mean that 5 Pounds will be issued as a coin?
« Last Edit: September 12, 2020, 03:35:12 PM by Pabitra »

Offline Figleaf

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Re: Egypt: New notes series, will 5 pounds be coinised?
« Reply #1 on: September 12, 2020, 08:06:47 PM »
I don't have any info on central bank policy, but inflation figures predict no change. Actual rate is 3.4% (July 2020) and collapsing tourism due to COVID-19 will prevent new inflation.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline Pabitra

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Re: Egypt: New notes series, will 5 pounds be coinised?
« Reply #2 on: September 13, 2020, 06:21:48 AM »
In a almost similar circumstances, Maldives had announced a new series of currency notes without 5 Rufiyaa design.

http://www.mma.gov.mv/#/currency/randhihafaheh

The 5 MVR was to be coinised but later, the decision was changed.
See

http://www.worldofcoins.eu/forum/index.php/topic,31201.0.html

Instead a new redesigned 2 MVR coin was issued

http://www.worldofcoins.eu/forum/index.php/topic,34859.0.html

The upward shift of note- coin boundary is not solely deictated by inflation although it is one of the major factors.

The other factor is growing prosperity.
The increase in transaction size, which results in increase in usage of smallest currency note ( due to increase in velocity of money) results in reduction in life of that denomination. Thus economic benefits accruing out of that note during its life period are lower. This needs to exploring of use of techonogy to enhance its durability without proportionate increase in manufacturing cost. Use of polymer notes is a step in that direction. With latest type of substrates, increase of life is said to be of the order of 250 percent.

In third world nations, especially those which have had overthrown "corrupt" or had end of civil war, it is expected that GDP has risen faster than population hence increase in production of goods and services improved per capita income, resulting in higher usage of lowest denomination of notes. This results in shift of note coin boundary.

An unidentifiable factor remains the usage and need of coins in vending machines where, note accepting machines are not cost effective.

However, despite all factors being taken in to account, it is not possible to explain downward shift of note coin boundary which has taken place in countries like Jordan, Malaysia, Nepal, Oman, Papua New Guinea etc

The only thing I can say is that nations which are "backward" must be "backward" for a reason and it is one of those reasons.