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"Report and Accounts 2000"

Banknotes and Coins

At the end of 2000 banknotes and coins in circulation amounted to kr. 44.8 billion. This represents a decrease of kr. 1.6 billion against the previous year, when particularly the stocks of cash depots and banks were extraordinarily high owing to special year-2000 measures.

In April 2000 Danmarks Nationalbank issued a commemorative coin to mark the 60th birthday of Queen Margrethe II.

At the request of the government the Nationalbank prepared the preliminary design of Danish euro coins.

The withdrawal of old banknotes, Series 1972, is proceeding according to plan, but old banknotes for a value of kr. 3.3 billion are still in circulation.

Banknotes and coins in circulation

The total banknotes and coins in circulation^[1] at the close of 2000 amounted to kr. 44.8 billion, which represents a decrease of kr. 1.6 billion against the previous year, but an increase of kr. 3.8 billion against 1998. Over a two-year period the circulation of banknotes and coins has thus increased by kr. 1.9 billion per year. This generally corresponds to the trend of the preceding years.

The circulation of banknotes was extraordinarily high at the close of 1999 due to the contingency measures in connection with the millennium rollover, cf. the 1999 Annual Report p. 67ff. An increase in the stocks of cash depots and bank branches, including ATMs, accounted for the major part of the increase. The extraordinary measures were phased out during January 2000, so that the circulation of banknotes returned to the normal level. At kr. 40.6 billion, the value of banknotes in circulation at end-2000 was therefore kr. 1.8 billion lower than one year before.

The circulation of banknotes in 2000 followed the trend of previous years. Use of the small denominations (50- and 100-krone notes) are used most during the summer months, cf. Chart 33. Circulation of banknotes is influenced by factors such as public holidays and the seasons of the year.

Chart 33 Circulation of individual banknotes

Over the past two years the 200-krone note has seen the greatest increase in circulation. This has been at the expense of the 100-krone note. The main reason is that 200-krone notes have increasingly replaced 100- krone notes in ATMs. The total circulation is shown in Table 2a, p. 164.

Pursuant to the Danmarks Nationalbank Act of 1936 the circulation of banknotes must be covered by the Nationalbank's holdings of gold and other assets. Since September 1939 an exception has been made from the gold coverage provision.

Coins in circulation increased by 5.0 per cent to kr. 4.1 billion in 2000. The corresponding figures for 1999 and 1998 were 3.6 per cent and 5.1 per cent, respectively. The total coins in circulation and The Royal Mint's production are presented in Table 3a, p. 165.

Commemorative coin to mark the 60th birthday of Queen Margrethe II
It is a tradition in Denmark to issue commemorative coins to mark special royal events. Commemorative coins were therefore issued in connection with Queen Margrethe's 60th birthday on 16 April. The coins were designed by the sculptor, Professor Mogens Møller, cf. Box 6.

Box 6 Commemorative coins to mark the 60th birthday of Queen Margrethe II

The Queen was presented with two commemorative coins of fine gold. In addition, 61,000 200-krone coins of fine silver were minted, as well as one million 20-krone coins of the same alloy and size as the ordinary 20-krone coins in circulation.

The commemorative coins are legal tender, but are purchased mainly by collectors. As encashment is therefore not very likely, the seigniorage from the issue of the 20-krone coin has been calculated at kr. 19 million, half of which has been paid to the Crown and half to the Ministry of Economic Affairs for charitable purposes.

Replacement of Series 1972 by Series 1997
The present series of banknotes was put into circulation in 1997-99. The various denominations have been replaced at varying speeds, reflecting the degree to which the individual banknotes are used and how they are treated by users. The 100-krone note was replaced at a slightly faster rate than the other banknotes. 86 per cent of the old 100-krone notes had been withdrawn from circulation after 13 months, cf. Chart 34, whereas only approximately 78 per cent of the old 50-krone notes had been withdrawn by the end of 2000.

The total current circulation of Series-1972 banknotes is kr. 3.3 billion. It must be expected that a proportion of the old banknotes will never be returned to the Nationalbank. There were still 5-, 10- and 20-krone notes for a value of kr. 205 million in circulation at end-2000^[2].

Chart 34 Remaining proportion of series 1972 in circulation

Counterfeiting

After rising throughout the 1990s, the number of counterfeit banknotes found in circulation has remained more or less unchanged since 1998.

From 1999 to 2000 the number of counterfeit banknotes found in circulation decreased moderately from 673 to 665, cf. Chart 35. The most frequently counterfeited banknote in 2000 was the 500-krone banknote; almost half the counterfeit banknotes found in circulation were 500-krone banknotes. The number of confiscated banknotes which had not been put into circulation varies from year to year. In 2000, 152 counterfeit banknotes were seized, which is 10 less than in 1999.

Chart 35 Number of counterfeit banknotes

The incidence of counterfeiting is very limited in Denmark. In 2000 there were 5.1 counterfeit banknotes for each million genuine banknotes. This figure is very low in relation to comparable countries, cf. Chart 36.

Chart 36 Counterfeit banknotes found in circulation in 2000, international comparision

One reason for the low number might be that Danish banknotes are generally of high quality. Worn banknotes which can be more difficult to identify as genuine are withdrawn from circulation when they are received by a bank and are returned to the Nationalbank, where they are replaced with new banknotes.

In connection with the issue of the present series the Nationalbank conducted an information campaign to enhance familiarity with the new banknotes as well as awareness of the security elements used. Although the incidence of counterfeiting is low, the Nationalbank has continuous focus on increasing the security of the Danish banknotes.

Preliminary design of Danish Euro coins

In connection with the referendum on 28 September on Denmark's adoption of the euro, at the request of the government, the Nationalbank prepared a preliminary design of Danish euro coins, cf. Box 7. All euro coins have a common side, as well as a national side designed by the individual member states.

Box7 Proposed national sides og danish Euro coins

The design was presented at a press conference at the Ministry of Economic Affairs on 22 August 2000.

Footnotes

[1] Calculated in accordance with the Nationalbank's balance sheet, cf. Table 2a, p. 164 and Table 3a, p. 165.

[2] Also includes 5-, 10- and 20-krone notes from note series dating back to 1945.

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Version 1.0 March 2001 Nationalbanken.
Published by Danmarks Nationalbank March 2001, http://www.nationalbanken.dk