Annual Report 1994. Cash

Breakdown of cash issued as of 30 December 1994

In 1994 1028.5 million kroons of cash was issued. The total amount of cash in circulation was 3512.34 million kroons as of 30 December 1994.

In the course of 1994, new banknotes and coins in the amount of 1100.45 million kroons were taken from the reserve fund to replenish the immediate reserve held in the central bank's vault, and banknotes in the value of 71.94 million kroons were redeposited in the reserve fund in order to change the structure of cash in the immediate reserve according to the needs of commercial banks. The major part of the issue of 1994 involved 50-, 100- and 500-kroon notes. Small denomination banknotes were taken from the reserve fund in order to replace the worn-out banknotes as there was no additional demand for them from the part of commercial banks. There was little demand for the 5-kroon coin. The demand for the 50-sent coins is diminishing. The orders for banknotes submitted by commercial banks were driven by the wishes of their customers who were mainly manufacturing based enterprises, state institutions and single individuals interested in using big denomination banknotes. Coins were ordered through commercial banks by trade organisations. The structure of cash (totalling 782.14 million kroons) taken from the immediate reserve held in the central bank's vault and additionally put into circulation in the course of 1994 is characterised by Table 1 (Cash taken from the immediate reserve held in the Eesti Pank vault and additionally put into circulation in 1993 and 1994).

Movement of cash between the vaults and the immediate reserve held in the central bank's vault as well as between the immediate reserve and the customers in 1994 is characterised by the following figures (million kroons):

The increase (up to 3,512.34 million kroons) of the cash in circulation since the monetary reform of 21 June 1992 up to 30 December 1994 is characterised by Table 2 (Cash in circulation since the monetary reform).

Cash in circulation has increased over the course of the post-reform years (million kroons):

On the average, 12.5% of the cash in circulation was held in commercial banks vaults and 87.5% circulated in the economy.

Simultaneously with the growth of cash supply, changes occurred in its structure. The share of small denomination banknotes was constantly diminishing. Structural shifts are characterised by Table 3 (Banknotes in circulation since the monetary reform).

The structure of the cash given to the cash exchange offices during the monetary reform was planned so that the denominations handed out made it possible for the people to carry out their first purchases without hindrance in shops which at that time did not have any change yet. Mostly small denominations were given to the population.

In the following years, the decrease in the share of small denominations was influenced by the changes in the prices, growth of payments carried out in cash, smaller processing capacities needed for bigger denominations, some peculiarities remaining from earlier periods in the attitudes of the population towards depositing, and low popularity of plastic cards (plastic money). There were similar changes in the structure of coins in circulation. This is reflected by Table 4 (Coins in circulation since the monetary reform).

The total demand for coins increased 1.02 times in 1994 compared to 1993, but the orders for the 50-sent and 5-kroon coins decreased.

The volume, structure and share of the worn out banknotes withdrawn from circulation is characterised by Table 5 (Worn-out banknotes withdrawn from circulation as of 30 December 1994).

Movement of cash

Circulation of cash between Eesti Pank and commercial banks was rather stable in all months in 1994 (see Table 6. Circulation of cash between Eesti Pank and commercial banks in 1994).

Amounts of cash paid out by commercial banks was 8.7 times, (i.e., by 22,166.34 million kroons) and amounts received from the economy were 10.9 times, (i.e., by 22,256.92 million kroons) bigger in 1994 than the turnovers between Eesti Pank and commercial banks. Cash turnovers in the economy increased considerably in 1994 compared to the year 1993. Payouts from banks increased by 1.7 times and the total of received amounts 1.8 times. Cash payments in 1993 and 1994 constituted 28.0% and 25.3% of the total of payments transactions respectively.

Activities of the Money Laboratory of Eesti Pank in 1994

In order to monitor and guarantee the circulation durability of the Estonian kroon, 117 examinations of damaged banknotes were conducted to determine the causes of the damage. Various methods of measuring security features of Estonian banknotes were analysed to determine the best ones (in keeping with the recommendations of the General Assembly of the Securities Federation and the resolutions of the Federation on the quality of banknotes and securities). These studies were started in 1993 already.

Fifty-six examinations of forged 500-kroon notes and 2 examinations of forged 100-kroon notes were conducted. Materials on the characteristic features of the forged 500-kroon notes were prepared for the banks operating in the Republic of Estonia. The population of Estonia has also been informed of the times when forged banknotes have been discovered on the market, and of the pertinent legislation.

The Money Laboratory is also engaged in the creation/design of new banknotes and coins. In 1994, a tender for the design of a 100-kroon coin commemorating the 100th anniversary of the Olympic games was organised. On 3 May 1994 a 5-kroon coin commemorating the 75th anniversary of the first bank transaction of Eesti Pank was issued. On 10 October 1994 a 50-kroon banknote was issued.