Thursday, March 10, 2011

Currency management: A critical aspect of central banks’ functions

Professor Akpan H. Ekpo
Director General WAIFEM
A week-long “Regional Workshop on Banknote and Currency Management and Forecasting in Central Banks” organised by the West African Institute for Financial and Economic Management (WAIFEM) in cooperation with De La Rue kicks off in Banjul, The Gambia on March 7, 2011. 
The organisers said the event, ending on March 11 could not have come at a more auspicious time given the problems of currency management in the sub-region and the urgent need to chart a new direction consistent with best practices, in order to engender greater efficiency and minimize the cost of printing and minting currency.
“Currency management is a critical aspect of central banks’ functions. The integrity of the currency and efficient supply of banknotes are indicators of a well-functioning central bank, especially in predominantly cash-based economies such as ours,” Honorable Amadou Colley, the Governor of the Central Bank of The Gambia (CBG) said.

He said issuing and destroying cash, maintaining note quality and guarding against counterfeit notes is a complex business which is increasingly costly.
This, he said has compelled some organizations to respond to this growing trend by outsourcing currency sorting. However, he said the International Organization for Standardization’s (IOS) certification ensures that minimum international quality standards are adhered to in the systems and procedures followed in an organization.
“Quality implies doing right things the right way, first time and every time,” he said.
“For currency managers, note designs present a series of interlocking challenges.
New designs must win public acceptance, incorporate requisite security features and meet durability and machine processing standards.”
Earlier on, the Director General WAIFEM Prof. Akpan H. Ekpo said no central bank function is more visible that currency management. This integral central bank function should be efficient, meet the demand and also present minimal issues which may damage the reputation of the country.
He said: “Recent developments in photographic and computer technology as well as printing devices, have made the production of counterfeit money relatively easy, thereby increasing the potential threat.”
According to him, the major challenge to protect currencies from counterfeiters has increasingly become more dependent on partnerships between law enforcement agencies, financial institutions and central banks, and with the security printing industry and high-grade supplier’s community.
This partnership, he said bridges geographic, jurisdictional, cultural and organizational divisions which were once impediments towards providing comprehensive and co-coordinated solutions for combating modern financial crimes.
The sub-regional body, WAIFEM, said the course will cover topics such as New Challenges in Currency Management; New Directions in Banknote Design; Security Features Against Counterfeiting; Forecasting the Demand for Banknotes; and Country Case Studies on Currency Management.

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