October 21, 2014 11:34
The mysterious disappearance from circulation of the new W50,000 banknotes is giving financial authorities some headaches. The recovery rate of the bills has fallen to below 20 percent, leading to concerns that they may soon vanish altogether.
According to the Bank of Korea on Sunday, W4.94 trillion worth of W50,000 banknotes were printed in the third quarter of this year, but only W982 billion have been recovered, a ratio of just 19.9 percent or 199 out of every 1,000 (US$1=W1,061). That was the lowest rate since the 1.1 percent when the banknotes first entered circulation.
BOK officials still have no clear explanation why the banknotes have become so hard to find. "We have no idea what happened to the banknotes since they don't come with labels or tags," a BOK official said. "There is a possibility that people are hoarding cash due to the impact of low-interest rates."
But it may be equally true that they are percolating freely through the underground economy.
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