Bank notes get top marks

By Phil Boeyen, ShareChat Business News Editor

Friday 5th April 2002

The introduction of polymer bank notes in New Zealand two years ago has been labelled a success by the Reserve Bank which says they are costing less to issue and proving harder to forge than the old paper notes.

The bank issued its first polymer note in May 1999 and by March 2000 all denominations had been converted from paper to polymer. By the end of last year around 110 million polymer notes had been issued.

In a review of the new notes the bank says there has been a very significant reduction in counterfeits detected by its processing machines since they were introduced. Last year there were 114 total forgeries compared with 501 in 2000, 758 in 1999, and 1,100 in 1997.

"The New Zealand Police have also seen a decline in reported forgeries," says the bank's head of currency, Brian Lang.

"The trends in the reporting of counterfeit notes to the police follow very closely the trends experienced by the bank. Between September last year and January this year the police saw only two counterfeit notes."

The new notes are also lasting longer. Mr Lang says the polymer $20 note has now been in circulation for 31 months with relatively few notes needing to be replaced.

"The average life of a paper $20 note was just under 24 months. On current indications, the polymer $20 note will last about 20 years.

"However, it is not expected that, in reality, the notes will last that long. Nevertheless, we will achieve significantly longer life with polymer notes than with the paper version."

Another advantage of the notes is that they are saving the country money, with the average cost of issuing the notes falling from $3.8 million in 1995/96 to an estimated $1.3 million for 2001/2.

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