Bank of Korea to Issue Large Denomination Bills

The Bank of Korea (BOK) has decided to issue large denomination bills, including 50,000 won and 100,000 won bills, again.

A high-level officials of the BOK said on August 30, “Issuing large denominations failed several times, but given the economy’s size, the value of bills available is too small, causing inconveniences,” highlighting the need to issue larger denomination notes.

The largest bill as of now is the 10,000 won bill, which has been in use since 1973.

The BOK has already decided upon the size of the bills in preparation for the large bill issuance. For 50,000 won denominations, the bill will be 154mm wide and 68mm long, and the 100,000 won denomination bills will be 160mm and 68mm long.

The lengths of 50,000 won and 100,000 won notes will be the same as those of the new 1,000 won, 5,000 won, and 10,000 won denomination notes to be issued next year. For the widths, there is an increase of 6mm according to the denomination value, ranging from 1,000 won (136mm) to 100,000 won (160mm) denominations.

According to the guidelines on issuing large denominations, the BOK successfully requested the Committee on Deposit Business under the Korea Federation of Banks that the size of the new checks and banknotes should be the same as the 100,000 won bill with the width of 160mm, and the length of 68mm.

In addition, it had also ordered CD/ATM producers to develop automated machines with the size of the 100,000 won bill in mind.

This is to avoid inconveniences to re-develop machinery of CD and ATM according to newly issued denominations, after making them to fit the new 10,000 won bill certain to be issued.

The BOK’s issuance director general, Kim Doo-kyung, said, “Once large denominations are issued, about 800 million 10,000 won bills would be replaced, taking up about 64 percent of the total number of bills (amounting to 2.07183 billion),” adding, “There would also be significant cost reductions in currency issuance and distribution.”

Since the inauguration of the BOK Governor, Park Seung, in May 2002, the BOK has suggested several ideas, including issuance of large denominations, changes in currency unit values, and design changes to the government, but only the last one has been accepted. Issuing large denominations requires government approval and consultations with the Monetary Board.

However, Director-General Kim said, “Compared to 1973 when the 10,000 bill first appeared, the per-capital Gross National Income has increased by 35 times, and consumer prices have soared by more than 12 times, but the face value of the denominations in use are the same,” adding, “Issuing large denominations is a more urgent task than changing the units of face value.”

The BOK expects to issue 50,000 and 100,000 won denomination bills in two years after it is approved and the designation of the figures on the bills and their designs are completed.

Kyung-Joon Chung news91@donga.com