ISSUE OF BANKNOTES AND COINS AND THEIR STRUCTURE

By 1 January 1997, there was a total of 4,986.78 million kroons in circulation, of which 717.27 million kroons (14.4%) were with the commercial banks and 4,269.51 million kroons (85.6%) were in circulation outside banks.

The increase of cash in circulation has slowed down: from the monetary reform that began on 20 June 1992, until the end of the same year, a total of 862.7 million kroons was put into circulation, and in 1993 another 1,501.58 million kroons, while from 1994 to 1996 the issuing of cash remained below the 1992 level (see Table 33. Structure of cash additionally issued into circulation, between 1994 and 1996). In 1996 the share of 1-, 2- and 500-kroon banknotes increased in circulation while the share of other denominations decreased. By 1 January 1997, the biggest number of banknotes in circulation were of 100-kroon denomination of which there was 13.48 million. The number of 1-kroon banknotes in circulation was 11.1 million, the number of 10-kroon banknotes amounted to 6.68 million, 500-kroon banknotes - 6.49 million, 5-kroon banknotes - 6.03 million, 2-kroon banknotes - 6.02 million, 25-kroon banknotes - 5.03 million, and 50-kroon banknotes - 1.89 million. The structure of banknotes in circulation has remained stable over the past three years, with the exception of 1- and 500-kroon banknotes the share of which has increased (see Table 34. Banknotes and coins issued into circulation, between 1995 and 1997).

Table 33. Structure of cash additionally issued into circulation, between 1994 and 1996

Denomination

1994

1995

1996

EEK mn

million
pieces

EEK mn

million
pieces

EEK mn

million
pieces

I. Banknotes total

769.29

-4.31

813.09

-2.38

643.90

0.52

    o/w 1 kroon

-0.64 (1)

-0.64

1.16

1.16

1.47

1.47

        2 kroons

-0.68

-0.34

-0.72

-0.36

1.41

0.70

        5 kroons

-10.05

-2.01

-1.80

-0.36

-1.07

-0.21

        10 kroons

-31.19

-3.12

-20.81

-2.08

-6.90

-0.69

        25 kroons

-92.16

-3.69

-48.02

-1.92

-17.54

-0.70

        50 kroons

113.06

2.26

6.82

0.14

-25.32

-0.51

      100 kroons

205.05

2.05

-88.83

-0.89

-115.56

-1.16

      500 kroons

585.90

1.17

965.29

1.93

807.41

1.61

II. Coins total

12.85

x

11.70

x

5.74

x

Total (I+II)

782.14

x

824.79

x

649.64

x

(1) A minus shows, that banknotes were more withdrawn from circulation than additionally issued there.

Table 34. Banknotes and coins issued into circulation, between 1995 and 1997 (%)

Denomination

By sum as of

By pieces as of

21/06/92(1)

01/01/95

01/01/96

01/01/97

21/06/92(1)

01/01/95

01/01/96

01/01/97

Banknotes total

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

    o/w 1 kroon

2.77

0.24

0.22

0.23

29.52

14.46

17.14

19.57

        2 kroons

2.84

0.33

0.25

0.24

15.13

9.69

9.46

10.62

        5 kroons

10.93

0.95

0.73

0.61

23.25

11.28

11.11

10.64

        10 kroons

15.85

2.72

1.72

1.35

16.86

16.13

13.11

11.78

        25 kroons

29.83

5.51

3.34

2.55

12.69

13.06

10.20

8.87

        50 kroons

-

3.25

2.79

1.92

-

3.86

4.27

3.33

      100 kroons

20.43

44.65

34.12

27.32

2.17

26.49

26.04

23.76

      500 kroons

17.35

42.35

56.83

65.78

0.38

5.03

8.67

11.43

Coins total

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

    o/w 5 sents

7.30

5.20

4.20

4.10

27.00

31.20

27.55

26.28

        10 sents

16.50

9.60

8.67

9.45

30.30

28.90

28.44

30.22

        20 sents

26.60

14.30

13.25

13.56

24.50

21.50

21.73

21.69

        50 sents

49.60

14.60

13.37

13.29

18.20

8.80

8.77

8.50

        1 kroon

-

27.60

37.58

38.23

-

8.30

12.33

12.23

        5 kroons (Republic of Estonia - 75 years)

-

16.30

13.25

12.14

-

1.00

0.87

0.78

        5 kroons (Eesti Pank - 75 years)

-

5.80

4.65

4.28

-

0.30

0.30

0.27

        silver coins

-

6.60

5.03

4.95

-

-

0.01

0.03

(1) Notes and coins issued into circulation at the moment of the introduction of the monetary reform

Mostly due to the increase in the share of 500-kroon banknotes the average value of a banknote in circulation increased by 10.65 kroons over the past year and on 1 January 1997, stood at 86.95 kroons.

In 1996 new 500-kroon banknotes were printed, with additional security elements, and these were put into circulation from 2 January 1997.

The number of coins in circulation amounted to 166.51 million by 1 January 1997. The bulk of them are of 10- and 5-sent denomination. The total number of 1-kroon coins was on the same level as at the beginning of 1996. There is still no demand for 5-kroon coins. According to the decision of the Board of Eesti Pank, the striking and issuing of 5-sent coins was ended but they will remain in circulation indefinitely.

CASH CIRCULATION

Cash circulation within the banking system and between the banks and the economy is characterised by Table 35 (Cash circulation, between 1994 and 1996). As we can see, the total sum of money paid out by commercial banks to the economy in 1996 was 8.9 and the amount received from the economy by the banks was 9.5 times bigger than the turnover between Eesti Pank and commercial banks.

Table 35. Cash circulation, between 1994 and 1996 (EEK mn)

 

Turnover between Eesti Pank
and commercial banks

Turnover between commercial banks
and economy

Turnover
between
commercial
banks

Issued from
Eesti Pank

Recieved by
Eesti Pank

Issued from
commercial banks

Recieved by
commercial banks

1994

2,891.04

2,257.16

25,057.38

24,514.08

1,050.00

1995

3,889.74

3,079.50

32,357.10

31,643.30

808.10

1996

5,073.50

4,423.90

45,267.40

41,916.60

611.30

The share of cash passing through Eesti Pank has increased as compared to the total amount of cash in circulation: in 1996 4,423.90 million kroons of cash was returned to Eesti Pank, which accounted for 88.7% of the total sum of cash in circulation at the end of the year. The ratio of returned cash to cash in circulation has been constantly increasing (in 1994 it was 64.3%, for example).

WITHDRAWAL OF WORN-OUT BANKNOTES

Since the monetary reform, a total of 68.22 million worn-out banknotes with the total value of 1,519.02 million kroons had been withdrawn from circulation by the end of 1996 (see Table 36. Worn-out banknotes withdrawn from circulation, between 1992-1996). Of these 73.6% or 1,117.51 million kroons were withdrawn in 1996.

Table 36. Worn-out banknotes withdrawn from circulation, between 1992-1996

Denomination

Worn-out banknotes withdrawn from circulation

Share of the total
amount of the same
denomination banknotes
in circulation (%)

EEK mn

Million
banknotes

Share of all
worn-out banknotes (%)

    1 kroon

14.63

14.63

21.44

56.86

    2 kroons

21.75

10.87

15.94

64.35

    5 kroons

57.61

11.52

16.89

65.63

  10 kroons

129.45

12.94

18.98

65.96

  25 kroons

186.77

7.47

10.95

59.75

  50 kroons

103.71

2.07

3.04

52.31

100 kroons

836.81

8.37

12.27

38.30

500 kroons

168.30

0.34

0.49

4.93

Total

1,519.02

68.22

100.00

x

Over the four and a half years that have passed since the reintroduction of the kroon, the majority of banknotes withdrawn from circulation have been 1- and 2-kroon notes. The destruction of withdrawn banknotes began in June 1995. By the end of 1996, the total worth of destroyed banknotes amounted to 1,272.36 million kroons, of which 1,029.98 million kroons or 80.9% of the total was destroyed in 1996.

ACTIVITIES OF THE MONEY LABORATORY

The main areas of activity for the Money Laboratory in 1996 were the pre-issue testing of banknotes and coins, examination of banknotes,pre-destruction testing of banknotes and research into preventing the forging of the Estonian kroon.

In 1996 the Laboratory conducted 262 examinations on a total of 3,083 damaged banknotes, and 35 examinations on 213 forged 500-kroon banknotes, 18 forged 100-kroon banknotes and two forged 50-kroon banknotes. Before destruction, a total of 4.46 million kroons worth of 100- and 500-kroon banknotes was identified.

At the request of commercial banks, 353 expert opinions were issued on the foreign currency banknotes of countries quoted by Eesti Pank. Out of the 861 foreign currency banknotes examined, 670 were counterfeit. The banks and the public were informed of the instances of discovering forged banknotes.