On Thursday, Guardian Media senior business reporter, Geisha Kowlessar-Alonzo, broke the story, headlined ‘Central Bank to unveil new $100 note’ in that day’s Business Guardian. She reported that in the Central Bank’s updated strategic plan for 2024, it announced plans to introduce the 2024 series of a polymer $100 note in December 2024.
The story elicited thousands of comments, likes and forwards on social media platforms from people who wanted to know why now, whether there is anything wrong with the current polymer $100 note and how much the process of introducing a new polymer $100 note would cost.
On the issue of the cost of the December 2019 demonetisation of the cotton $100 note, which means the law was changed to make that the cotton-based note illegal, the Central Bank’s annual report for the period October 1, 2019 to September 30, 2020, at note 20, outlines that the Central Bank’s total cost for the printing of notes and the minting of coins was $98.46 million.
That figure was broken down as follows:
* Cost of new notes issued—$78.77M
* Cost of new coins issued—$6.37M
* Other printing and minting expenses—$4.99 M
* Write-off of cotton $100 notes—$8.31M
Following is an exchange between the Business Guardian and the spokesperson for the Central Bank on Friday:
Q: Can ALL of the $78.77 million in the line item ‘cost of new notes issued’ be attributed to the polymer $100 note issued in December 2019?
A: No, this relates to the issuance cost for all denominations.
Q: Were any other new notes issued in the year ending September 30, 2020?
A: No other new notes were issued in the 2019/2020 financial year. However in the 2020/2021 financial yesr we issued all other denominations ($5, $10 and $20) in November 2020 and the $1 and $50 notes in February 2021.
Q: The line item for the ‘cost of new notes issued’ in the 2020 financial year is $78.77 million. And you said earlier: No other new notes were issued in the 2019/2020 financial year. Am I missing something:
A: The Central Bank issues notes to commercial banks periodically over the year, to replace damaged/used notes. The Central Bank keeps an inventory of all denominations of these notes to manage this demand. As a result, every year it will issue ‘new’ notes to be put into circulation by the commercial banks.
Q: The notes in the CBTT’s inventory are considered ‘new’?
A: The chief financial officer (CFO) of the Central Bank has advised that the notes are new in the sense that they have never been used.
Q: No the cost referred to relates to the manufacturing cost of the notes...The CFO has suggested that it may be helpful to look at Note 2m in the financial statements, which explain the accounting policies in relation to notes and coins.
Note 2m states:
“The stock of notes and coins is stated at original cost. Issues are accounted for using the First In First Out Method. All associated costs such as shipping, handling and insurance are expensed immediately. Printing and minting costs are expensed when the units of currency are issued and put into circulation.”
As a result of the social media response, Sunday Business sent the Central Bank eight questions (See below). In its initial response, (See below), the Central Bank made clear it would not disclose the amount of money it paid to its currency printer, De La Rue plc.
“While we’re unable to give details of the contract price, De La Rue International Ltd will supply the new notes at a cost (including design changes) that is not higher than the current cost of the existing $100 banknote,” said the Central Bank, in response to one of the eight questions submitted by this newspaper to it on Friday morning.
Guardian questions to the Central Bank:
1. Why do we need new $100 polymer banknotes and is there something wrong with the $100 banknote that was released in December 2019?
2. Will the 2019 $100 banknote be demonetised in the same way the paper $100 note was?
3. What will be different in the new polymer $100 notes?
4. How much did it cost to design, print and deliver the 2019 polymer series, which would be $1, $5, $10, $20, $50 and $100?
5. How much will it cost to design, print and deliver the 2024 series of the $100 banknote?
6. Is it only the $100 banknote being changed or will the others be changed as well?
7. Does introducing a new $100 banknote five years after the demonetisation of the paper banknote not signal a Central Bank commitment to a cash economy rather than a cashless one?
8. Who are the suppliers?
Central Bank’s initial response:
Thank you for your questions.
Central Banks generally order notes and coins from suppliers on an annual basis to distribute to banks. These notes and coins are of an approved design: in the case of the current $100 banknote this design was done in 2019 (if you look at the note you will see the text “2019 Series”).
As part of the normal process across the world, the designs are adjusted periodically, taking into account ongoing developments in technology and security features.
In this case after five years, we will have the 2024 $100 banknote. The only change will be an enhanced “security strip” incorporating the bird of paradise. So, the look and feel will be similar to the current banknote but the change will be obvious.
While we’re unable to give details of the contract price, De La Rue International Limited will supply the new notes at a cost (including design changes) that is not higher than the current cost of the existing $100 banknote.
We expect the new banknotes in December 2024 or January 2025 and will share the design and features with the public and banks over the next few months to ensure a smooth transition.
Kind regards
Central Bank Governor on demonetisation
In the Governor’s foreword to the Central Bank’s 2020 annual report, Dr Alvin Hilaire stated: “Among the other key achievements during FY2019/20 were the rapid demonetisation of the $100 cotton note and replacement by a polymer note in the context of a major national security operation...
“The demonetisation of the $100 cotton notes occurred at an unusually rapid pace to help to counter financial crimes. In this massive nationwide exercise, the Central Bank collaborated closely with the commercial banks, other regulators, the national security agencies and the media in assuring a smooth and meaningful outcome.
Who is De La Rue?
De La Rue plc is a British company headquartered in Basingstoke, England, with 2,042 employees, that produces secure digital and physical protections for goods, trade, and identities in 140 countries.
Established in 1821, the company sells to governments, central banks, and businesses.
On its website, the company states: “De La Rue has been a trusted supplier of high security documents and cash processing solutions to Trinidad and Tobago since 1907.
“In addition to providing the Central Bank of Trinidad and Tobago with its currency and high speed banknote sorting machines, De La Rue has supplied passports, identity cards and cash processing solutions to the Government of Trinidad and Tobago and the private sector.”
The website also outlines:
“Since 2019 four Caribbean central banks have converted their banknotes to polymer.
“Whilst the Eastern Caribbean Central Bank (ECCB), Central Bank of Trinidad and Tobago, the Central Bank of Barbados and the Bank of Jamaica had differing priorities, there were a number of requirements that remained consistent:
- The new banknotes had to last longer
- Any solution needed to be cost effective
- New banknotes had to remain cleaner for longer
- Any solution had to provide enhanced security
- The notes had to offer greater environmental sustainability
- The experience of the visually impaired and blind community had to be significantly improved