Confusion in the New 100,000 won Bill Issue.

There was much confusion when the Presidential Transition Committee (PTC) denied the consideration of the `New Denomination Bill`. The committee was known to positively considering a new denomination currency, when there was much controversy. The committee denied the consideration and delegates the responsibility to the Bank of Korea.

On February 11th, Citizen Participation Center of the PTC has announced that citizen suggestions of new currency reform and high denomination bill were categorized as a `Positive consideration subject` and was delivered to Bank of Korea. The Center explains that there is a need for new higher denomination currency bill due to hundred times growth of Korean economy since the first introduction of 10,000 won bill in 1973. For some time, the 100,000 won cashier’s check has been widely used as a high denomination bill, so the need for new denomination bill is inevitable.

In matters of new currency reform, the Center adds that the Bank of Korea will positively consider it.

This was a suggestion mentioned in the Bank of Korea`s report to the Presidential Transition Committee, so it was interpreted as the new government`s will.

However Huh Sung-Gwan, a committee member of the PTC`s Economy-1st Division denies, "Denomination reform is a sensitive issue that will affect even the vending machines on the street and general public may mistook it for all-out currency reform. The Committee has never considered it.”

The Citizen Participation Center also has rectified their previous statement after controversy. They announced that this is but a mere suggestion out of 22,168 citizen suggestions and there was a misunderstanding in the categorizing process.

The Bank of Korea argues that since the previous currency reform in the 1962, the Korean economy has grown about 1,600 times larger and the inflation 45 times larger, therefore the denomination reform is inevitable.

“The denomination change is in long-term study for consideration. After adequate discussions, the decision will be made. Even if the government decides, the implementation will take place four to five years later,” says Park Seung, President of the Bank of Korea.

Kwu-Jin Lim Joong-Hyun Park mhjh22@donga.com sanjuck@donga.com