Academics Advocate Limiting Duration of Currency Notes

Addis Ababa August 04/2018 Ethiopian academics say the government needs to limit the duration of circulation of currency notes to stop the high-level movement of fake money in the market. They believe that limiting the duration of currency notes will help the economy to get rid of old and unwanted paper money from the market. Ethiopian Economists Association Principal Researcher, Dr. Assefa Admassie said using currency notes for a long period will create the risk of fabricating fake money. Currency notes should therefore be changed periodically, he said, adding that the government needs to inject money into the market innovatively. According to him, the periodic issuance of notes should be preceded by assessment to reduce vulnerability. “Limiting the duration of currency notes can be a short-term plan in our context and putting expiry date on the currency a long-term plan in the economy,” he stated. The researcher says that limiting the duration of currency notes and putting expiry date on notes are different. Limiting the duration of currency notes in the market means issuing new currency notes which have same design with the previous ones, while issuing currency notes with expiry dates means producing notes with new format and design. Dr. Assefa argues that limiting duration of currency in the market is advantageous for countries like Ethiopia since issuing currency notes with expiry dates require huge logistics and cost. Economics Assistance Professor at Addis Ababa University, Berhanu Denu said allowing currency notes to stay for a long period in the market encourages the movement of fake money as people can easily print it. The Assistance Professor agrees that issuing notes with expiry dates is the best option but it is very costly. He suggests that the government needs to conduct research to learn whether it is time to change currency notes as fake money has been circulating hugely in the country. Assistance Professor at Ethiopian Civil Service University, Kassa Teshager also said Ethiopia needs to change its money periodically because using one type of money for long years can cause fluctuations. He stated that fluctuations may come because of fake money notes that may be injected in the market. Therefore, the government should work on limiting the period of circulation of money to remove several risks that may occur due to fake money.