The National Bank of Kyrgyzstan proposes to introduce a fee for the exchange of old-design «white» US dollars. The central bank has developed a relevant draft resolution to amend the current one — «On the order of exchange operations with cash foreign currency in the Kyrgyz Republic», approved in 2019.
The bank believes that it is necessary to provide an opportunity to set fees for exchange operations with US dollar banknotes up to 2006 issue, which have not lost the status of a means of payment.
«Despite the outdated design, «white» dollars remain legal tender. However, in some cases, financial, credit organizations and clients face difficulties in exchanging or accepting them, which is due to fears of counterfeiting or preference for new banknotes,» the background statement says.
At the same time, customers of commercial banks without any restrictions send money in US dollars through money transfer systems, dollar payments through the SWIFT system, use the opportunity to replenish settlement accounts (without the purpose of sending payments through the SWIFT system), as well as conduct exchange transactions with «white dollars» of the United States at the standard (not undervalued) buying rate and without a fee.
The National Bank also reminds that the cases of free exchange of old-design bills for new ones by replenishing customers’ current accounts, without the purpose of sending money, in one bank branch with «white dollars» with subsequent withdrawal from current accounts in another bank branch, but with new-type bills, have become more frequent. Thus, banks accept «white US dollars» without restrictions, but when issuing them to clients, they receive a categorical refusal with the requirement to issue US dollars only of the new type.
According to the bank, the population and exchange offices bring «white US dollars» in large volumes to the cash desks of bank branches on a daily basis, the cash desks are filled with these «illiquid» banknotes, which entails inefficient management of banks’ funds, increased costs associated with the transportation of cash, as well as updating the software of ATMs and cash registers to determine the authenticity of these banknotes.
In order to improve the situation in the foreign exchange market, to solve the problem of large idle balances of cash «white» U.S. dollars at cash desks, banks periodically remove accumulated «white» dollars and in exchange bring into the country new bills in MINT (Uncirculated) condition.
Thus, banks regularly clear the country’s foreign exchange market from «illiquid» foreign currency bills. When carrying out banknote transactions, namely import and export of cash US dollars, banks incur expenses in the form of payment of fee for import and export of cash.
Now banks face the problem of accumulation of excessive cash in bank cash desks, namely old-design US dollars, the so-called «white dollars».
Old-type US dollar banknotes of dubious quality were detected in some banks, in connection with which temporary measures were taken to minimize operational risks and prevent further spread of counterfeit banknotes.
In addition, the previously available opportunities for exporting old-design US dollars to Turkey are currently limited or absent due to the reluctance of counterparties to accept «white dollars». At the same time, banks continue to search for alternative options for export of old-design US dollars cash.
In order to reduce the risks associated with the possibility of the appearance of counterfeit banknotes in the currency market of Kyrgyzstan, as well as to create conditions for the export of «illiquid» «white» US dollars, it is proposed to consider the possibility of introducing separate requirements for transactions with US dollars issued before 2006 (if the currency has not lost the force of a means of payment) by providing the possibility of charging fees when conducting transactions with them.
