Reserve Bank readies readies for 2000

If the Y2K bug bites deeply enough and you feel an overwhelming urge to rush out and withdraw your cash from the nearest money machine, at least you won't have to worry about causing the New Zealand economy to crash. The Reserve Bank is stockpiling old notes in preparation for possible high cash demands in 2000, and also issuing new notes next year.

If the Y2K bug bites deeply enough and you feel an overwhelming urge to rush out and withdraw your cash from the nearest money machine, at least you won't have to worry about causing the New Zealand economy to crash.

The Reserve Bank is stockpiling old notes in preparation for possible high cash demands in 2000, and also issuing new notes next year. "It's a happy coincidence, really," says Brian Lang, chief manager of the Reserve Bank's currency department. "We're issuing new polymer notes in the middle of next year. In the normal course of events we would just destroy those [old] paper notes as they return." Instead, the bank will put aside paper notes deemed to have enough "life" left in them to go back into circulation in case there is a run on hard currency.

"So we are stockpiling notes but we're definitely not printing extras."

In the US the Federal Reserve plans to increase its stores of US bank notes by $US50 billion. By the close of next year, $US200 billion in currency will be stored in government vaults, up from the $US150 billion normally held in reserve. That's in addition to the $US460 billion in notes circulating in the US and abroad.

New Zealand isn't quite in the same league, dollar-wise.

"Normally there are between 65 and 70 million bank notes in circulation, worth around $1.6 billion. We'd at least have that amount plus whatever we can use from the paper notes."

The new polymer notes, similar to the Australian bank note, are to keep the same design as the old paper notes, meaning there should be no trouble presenting either type of note.

The new notes cost around 5 cents each, compared with about 10 cents for the paper notes. Polymer notes generally last about four times as long as their paper counterparts.

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