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"Report and Accounts 2001"

Banknotes and Coins

At the end of 2001 banknotes and coins in circulation amounted to kr. 47.3 billion.Thisrepresentsanincreaseofkr.2.5billionagainst the previous year.

In 2001 Danmarks Nationalbank issued 10- and 20-krone coins with a new portrait of the Queen.

A new Faroese 50-krone banknote was issued in 2001 as the first in a new series of Faroese banknotes.

Banknotes and coins in circulation

The total banknotes and coins in circulation at the close of 2001 amounted to kr. 47.3 billion, which represents an increase of kr. 2.5 billion against the previous year, equivalent to growth of 5.6 per cent. This is generally in line with the trend in recent years of an annual increase in the circulation of banknotes and coins by 5-6 per cent, disregarding the extraordinary increase up to the millennium rollover and the equivalent subsequent decline, cf. p. 69 of the Annual Report for 2000.

In recent years the proportion of large-denomination banknotes in circulation (the 200-, 500- and 1,000-krone notes) has increased, cf. Chart 26. Circulation of particularly the 200-krone banknote has risen, at the expense of especially the 100-krone note.

Use of the three smallest banknote denominations (the 50-, 100- and 200-krone notes) fluctuates considerably over the year, peaking in the summer months and towards the end of the year, when the use of all banknote denominations is generally high, cf. Chart 27.

Coins likewise showed an increase in circulation of the large denominations, and particularly the share of 20-krone coins has increased. Both the average coin value and the average banknote value have increased steadily in recent years, cf. Chart 28.

The total circulation of banknotes is presented in Table 2a on p. 160, while the total coins in circulation and the production of The Royal Mint are presented in Tables 3a and 3b on p. 161.

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

In 2001 Danmarks Nationalbank established cash depots in the Faroe Islands to replace the cash distribution previously handled by the High Commission. Cash depots were established at Føroya Banki and Føroya Sparikassi. Cash supply in the Faroe Islands thus now adheres to the same principles as in Denmark and Greenland.

New portrait of the queen on the 10- and 20-krone coins

As from 2001, the 10- and 20-krone coins are minted with a new portrait of the Queen. The new portrait is by the sculptor, Professor Mogens Møller, who also undertook the portrait on the commemorative coin issued to mark Queen Margrethe's 60th birthday, cf. the Annual Report for 2000, pp. 70-71.

The portrait of the Queen on the 10- and 20-krone coins is replaced from time to time to ensure a contemporary portrait which is a good likeness. For the current coin series, which commenced in 1989, two previous portraits of the Queen have been used. These portraits were designed by Hanne Varming (used in 1989-1993) and Jan Petersen (used in 1994-1999).

New faroese banknote series

Danmarks Nationalbank issued a new Faroese 50-krone note in 2001. It is the first of a series of new Faroese banknotes to be issued over a period of 5 years. The dominant motifs on the five new banknotes are fragments of Faroese animals. Other motifs on the face and reverse of the banknotes are inspired by the Faroese landscape.

The dominant motif on the 50-krone note is a ram's horn printed in intaglio. The reverse shows a hillside from the village of Sumba on the west side of Suðuroy, based on a watercolour by the artist Zacharias Heinesen.

The Faroe Islands have the same currency as Denmark, but in accordance with the Act on Faroese Banknotes they have their own banknotes that are manufactured by Danmarks Nationalbank. Faroese banknotes are legal tender in the Faroe Islands, but Danish banknotes can typically also be used. Danish banknotes can also be exchanged on a 1:1 basis free of commission. Faroese banknotes can be exchanged at Danmarks Nationalbank on a 1:1 basis free of commission. The Faroe Islands use the same coins as Denmark.

Counterfeiting

The number of counterfeit banknotes found in circulation in Denmark per year has remained close to a level of around 700 since 1998. In 2001, 720 counterfeit banknotes were found in circulation – an increase of 55 on 2000^[17].

The number of confiscated counterfeit banknotes that had not been put into circulation varies from year to year. In 2001, 2,274 counterfeits were seized, which is a considerable increase on 2000. Most of the counterfeit banknotes found in 2001 that had not been put into circulation related to one extensive case. There is thus no corresponding increase in the number of counterfeiting cases.

The extent of counterfeiting is still limited in Denmark compared to other countries. In 2001, 5.4 counterfeit banknotes were found per million genuine banknotes. This ratio is low in relation to comparable countries.

Counterfeiting, attempted counterfeiting, or aiding and abetting counterfeiters, are serious offences liable for criminal penalties under the penal code. The maximum penalty is 12 years.

Footnotes

^[17] For further details, see Ulrik Bie and Johan Sebastian Gabel, Counterfeit Banknotes, Danmarks Nationalbank, Monetary Review, 1st Quarter 2002.

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Version 1.0 March 2002 Nationalbanken.
Published by Danmarks Nationalbank March 2002, http://www.nationalbanken.dk/