Why do some central banks denominate their currencies so high like 5000, 10000, or 50000?
As we see, different countries have different denominations for their currencies, and mostly they have kept their highest denomination 100 or 1000. What are the factors do they consider while denominating their currencies?
- L. E. GantLv 72 months ago
There are two main reasons.
One is (more or less) inflation -- the currency is low valued compared to, say, the US dollar.
The other is that those high-valued denominations are treasury notes. These get used for large currency transactions. You don't usually see these in normal money in circulation. Like there used to be a whole series of Bank of England million pound notes, and even a 100 million pound note (it's used to back up the Scottish and Northern Ireland banks which issue their own currency).
The US Federal Reserve has issued notes up to $100,000, and up to $10,000 for circulation notes -- see:
- OiyLv 62 months ago
It‘s in textbook mostly from American economists. It should change to the new dollar. That will help the economy. But what we have seen in many countries like India or Argentina etc, it was a mess. And it has contributed nothing, also to the dollarization. Japan and South Korea have Never followed such a practice. And they are still doing so well. Italy has forced to do it because it has entered the eurozone. But now it is regretting.
- JuanBLv 72 months ago
The value of the currency is the main factor. I look at your numbers and those bills are probably close to a $5, $10, and $50 bill in USA. Maybe even $2,50, $5, and $25.
- Anonymous2 months ago
Indonesia has a currency nearly 20000 to a pound
- What do you think of the answers? You can sign in to give your opinion on the answer.
- ZirpLv 72 months ago
The main factor is whether those bills are practical. Here in the netherlands, a lot of shops refuse to accept bills of a hundred euro.
Back before the euro, we had coins of 5 guilders because the bills wore off too fast
- RickLv 62 months ago
some countries currency is only worth a penny each ...................