NZ unveils new Canadian printed notes

The Reserve Bank of New Zealand has unveiled designs for its colourful new banknotes, aimed at foiling counterfeiters. The banknotes feature the same flora, fauna and famous New Zealanders that appear on the current designs, but in much more vibrant, bold colours.

The notes will be printed in Canada after Securency declined to tender for the renewed contract.

The new notes will be drip-fed into circulation from October 2015, starting with the $5 and $10 notes. The $20, $50 and $100 notes are due to be released in April 2016.  

Both the existing and new notes will circulate together as legal tender. RBNZ deputy governor Geoff Bascand said the old series notes would be withdrawn from circulation "naturally" when banks returned worn and damaged notes. It will take 12 to 18 months for the majority of notes in circulation to be the new design.

Bascand said the need to stay ahead of counterfeiters, who now have easier access to sophisticated copying and printing equipment, was an important aspect of the redesign.

"The transparent windows are larger and striking holographic features will help make the notes very easy to verify, but hard to counterfeit."

The bank said other new security features would be added, including colour-changing or "optically variable" features.

Bascand told reporters that the rate of detected counterfeit notes in New Zealand was low compared to other countries - and below the performance target of less than ten notes out of every million set for the Reserve Bank by the government.  

The RBNZ said there were approximately 148 million notes in circulation, and it expected it would cost an extra NZ$7 million to NZ$8 million a year for five years to issue and distribute the new notes and to replace its reserve stocks.

The purchasing cost of the new notes over five years will be around NZ$80 million, but the bank said it would incur some printing costs to replace lost or damaged notes of the current design in the ordinary course of business, leading it to estimate additional costs to move to the new design at around NZ$40 million.

In addition, more than 40,000 pieces of cash-handling equipment would need to be calibrated to recognise and handle the new notes.

"The Reserve Bank is working with manufacturers of banknote equipment to ensure they are well prepared for the changes, and the transition to the new notes is as seamless as possible," the bank said, asking retailers to contact their suppliers to ensure they were participating in the calibration program.  

Bascand said there was a consistent growth in the number of notes in circulation of 4.6 per cent each year, "notwithstanding the talk of a cashless society", a phenomenon observed by many central banks around the world.