15:38 | 14/01/2016 Finance - Banking
The State Bank of Viet Nam (SBV) will not issue new banknotes with denominations lower than VND5,000 (22 US cents) for the Tet (Lunar New Year) holiday to save costs.
The SBV will not issue new banknotes with denominations lower than VND5,000 for the Tet holiday — VNA/VNS Photo Tran Viet
The announcement was made by SBV Deputy Governor Dao Minh Tu at a press meeting in Ha Noi on January 12th.
However, the central bank will still reserve a number of used banknotes for the VND500, VND1,000, VND2,000 and VND5,000 denominations that meet quality standards to fulfil demand during the Tet holiday, which is the largest traditional holiday for the Vietnamese, and will begin on February 8.
Bills of small face values, especially VND500 and VND1,000, are mainly used as donation money, and not as a means of payment. As a Tet tradition, Vietnamese usually donate money in small denominations to pagodas and temples to pray for luck in the New Year.
However, the central bank affirmed that it would still provide an amount of new bills with larger face values to meet rising demands during Tet.
This will be the fourth year that small banknotes of under VND5,000 denomination are not being printed and it has helped save some VND1.5 trillion (US$65.5 million) for the State budget, the central bank estimated.
The central bank also requires credit institutions, which have ATMs, to ensure that the demand for cash withdrawals is met.
Commercial banks and other institutions that are qualified for foreign currency exchange service would also operate normally to meet the exchange demand of tourists./.