Inflation cuts printing of low-value notes
Reporting by Nan Kham Kaew

Oct 14, 2008 (DVB)–The shortage of low-denomination banknotes is causing inconvenience to businesses and consumers of low-priced goods, according to residents of Rangoon, Mandalay and Meikhtila.

Shop owners have been giving goods instead of change to customers who buy low-priced items, shoppers said.

"Shops don't even have 200 kyat notes now so it's a headache whenever you buy goods that are worth like 300 kyat and you only have a 500 note – they will give you candies for change," one consumer said.

"Tea shops will give you a cigarette instead of a 50 kyat note and some shops will give you a bag of instant coffee mix," he said.

"So we have to buy 500 kyat worth of goods every time we go shopping."

Some people said the low denomination notes that are still in circulation were printed a long time ago and some have become almost unusable.

"You will see stitches or tape on the banknotes as they have often been torn into two pieces after being passed from hand to hand for such a long time," one shopper said.

"It's because [the government] is only printing the high denomination notes – they stopped printing lower denominations such as 200, 100, 50, 20 and 10 as they aren't really worth anything now."

Economist Sein Htay said printing more bank notes could exacerbate the problem of inflation.

"If the government prints more bank notes while inflation is high, that increases the supply of money which increases inflation even more."

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