Why na­tions print cash out­side their bound­aries

Business Daily (Kenya) - - TOP NEWS -

Last week, the Liberian gov­ern­ment an­nounced it had lost $104m (£79m). This wasn't through any bad in­vest­ment de­ci­sion or some ac­count­ing fraud, the money - in cash - had lit­er­ally gone miss­ing.

The ban­knotes had been or­dered by Liberia's cen­tral bank from print­ers over­seas and had dis­ap­peared af­ter pass­ing through the coun­try's main port and air­port. The gov­ern­ment is now in­ves­ti­gat­ing.

Mean­while, last month In­di­ans ex­pressed out­rage on so­cial me­dia about print­ing money.

A re­port in the South China Morn­ing Post claimed the State-owned China Banknote Print­ing and Mint­ing Cor­po­ra­tion had won a con­tract to print In­dian ru­pees, prompt­ing con­cerns about na­tional se­cu­rity.

In­dia's gov­ern­ment de­nied this, say­ing it was "base­less" - it ac­tu­ally prints all its cur­rency in four high-se­cu­rity presses.

But both these cases have raised the ques­tion of whether we should care where our money is printed. Is it com­mon prac­tice?

Some coun­tries, like In­dia, do man­u­fac­ture all their cash at home. For ex­am­ple, the US is le­gally obliged to print its ban­knotes within its ter­ri­to­ries.

But for most it's ac­tu­ally a com­mon prac­tice to print some of their money abroad, while oth­ers like Liberia don't even have their own mint.banknote pro­ducer De La Rue es­ti­mates the com­mer­cial print mar­ket makes up 11 per cent of all ban­knotes pro­duced. The BBC con­tacted a num­ber of money man­u­fac­tur­ers, all of which re­fused to dis­close ex­actly which cen­tral banks they pro­duce money for. Many gov­ern­ments don't like to talk about it ei­ther.

"It be­comes an is­sue of na­tion­al­ism," says Dun­can Con­nors, an ex­pert in the his­tory of money at Durham Uni­ver­sity. Why don't coun­tries do it them­selves? Ba­si­cally, it's ex­pen­sive and dif­fi­cult to do.

Im­age copy­right Getty Im­ages Im­age cap­tion The Solomon Is­lands out­sources its cur­rency print­ing

The com­pa­nies in­volved in print­ing notes have been in ex­is­tence for a few hun­dred years. They have spe­cial­ist tech­nol­ogy and de­vel­oped cred­i­bil­ity on se­cu­rity.

De La Rue be­gan pro­duc­ing ban­knotes in 1860, first for Mau­ri­tius and then else­where. It man­u­fac­tures the new poly­mer Bank of Eng­land fivers and ten­ners.

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