$50 note the cornerstone of cash

The Reserve Bank of Australia made steady but not exceptional profits from its transaction banking, note issuing and commercial activities last year.

The RBA annual report shows that the net profit from transactional banking services in the year to June 2008 was $2.3 million, compared with $2.7 million the previous year. The RBA provides these services to Commonwealth government clients.

Note Printing Australia earned net profit of $6.4 million in 2007/08, up from $5.1 million in 2006/07.  

Securency, a joint venture with Innovia (which manufactures the plastics used to print bank notes and some other items) earned a profit after tax of $13.5 million in 2007, about the same as in 2006.

The joint venture opened a second manufacturing plant in Mexico during the year.

The central bank is finally running down its stock of $100 notes manufactured in 1999 in connection with preparing for any run on cash during the "year 2000" mania of the late 1990s and expects to order new stock next year.

The RBA said the stock of banknotes on issue at the end of June was $42.1 billion, or around $1970 per head. The $50 note is increasingly the most important note in circulation, accounting for nearly half of the value of banknotes on issue and 43 per cent of the number of banknotes on issue. Three quarters of notes issued through ATMs are now $50 notes.

The RBA annual report shows a slight rise in the incidence of counterfeiting over the year, though it remains trivial and low quality, with seven counterfeits detected per million genuine banknotes in circulation, up from around six per million a year earlier.

About 7000 counterfeits were detected with a nominal face value of around $380,000. The $50 banknote accounted for around 75 per cent of all counterfeits passed.