Azernews.Az

By Nazrin Gadimova

The level of money counterfeiting in Azerbaijan is much below the world average, the Central Bank of Azerbaijan (CBA) official Hajibaba Masimov said on July 18.

"Whereas in developed countries, notably, in Europe, there is one impounded counterfeit banknote per each 20,000 banknotes in circulation, in Azerbaijan the figure is one per 250,000," said Masimov, who heads the CBA's department for cash transactions.

According to Masimov, the CBA has withdrawn from circulation and handed over for elimination more than 600 counterfeit banknotes from the domestic market in the first half of 2013.

"There is a trend toward growth in Azerbaijan. However, counterfeiters are using methods and techniques of a very low level. Often, they simply copy banknotes. Therefore, it is not difficult to detect counterfeit money," Masimov said.

The CBA also continues to consider the issue of coins. According to Masimov, the CBA began to look into this possibility before the start of the process of currency denomination. However, there are factors that make an issue of coins of larger denomination inadvisable.

"For example, it can cause logistical problems, that is, difficulties with the collection and transportation of a large number of coins. It also increases the risk of a spread of counterfeiting. Coins are more vulnerable to forgery in terms of the degree of protection. Moreover, because of their low denomination, the population does not hand over counterfeit coins and they continue to circulate."

Masimov said that for example, in Europe, the volume of counterfeit coins in denominations of one and two euros is increasing, which creates some problems for the economy. Another important factor concerns problems that may arise with social payments, such as withdrawal of money by retirees.

In Azerbaijan, as a result of the currency denomination [a full transition to the new scale of prices took place in 2007], carried out by the CBA, complete replacement of old banknotes with new ones was completed by December 31, 2006. Since 2007 Azerbaijan has used new banknotes as a means of payment.

The total volume of the new currency was 1.7 billion manats, including cash reserves for three years. 94 percent of the total amount of funds are banknotes (1, 5, 10, 20, 50 and 100 manats) and the remaining 6 percent are metal coins (1, 3, 5, 10, 20 and 50 gapiks or one-hundredth fractions of 1 manat).

The life cycle of banknotes is three to five years, while that of coins is 20 years.

Currently, a heavy burden falls on the banknotes in the denominations of 1 and 5 manats. Their lifespan is one and a half to two years, as they are rapidly deformed due to frequent use. Therefore, to reduce the burden and the costs, the CBA considers issuing coins of large denomination.