Tag: Money

Abolition Of Coins Around The World

Abolition Of Coins Around The World Knew the last century, several operations to cancel the money in several countries like Russia, Pakistan, Zimbabwe, Australia and several other countries. India is the latest country to have this Step 2 Wealth process and that in November 2016, where India issued a decision to withdraw banknotes from class 500 and Rs 1000 and which constitute more than 70% of the money in circulation in India

Some countries recently along the lines of India, Zimbabwe and some African countries the abolition of dealing with some cash leaves and withdraw completely from the economy, where India has recently decided to suspend trading in some securities, which constitute more than 70% of the money supply paper traded in India, which led to large protests and opposition from citizens and political parties as a result of sudden decision. According to the Indian government, the reason for this decision is an attempt to fight corruption and the illegal wealth. But the event that created the reactions crossed the borders of India to create controversy among the political and economic elites on the feasibility and effectiveness of this process and that make money many citizens without value.

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What are the practical abolition of money?
Through the abolition of money process (Demonetization) governments to abolish the nominal value of the paper bank, or a coin (may also include cancellation of postage stamps) are handled and traded within the country’s borders and issued by the authorities and carry a nominal value, as can be this cancellation includes the official currency of the country (similar to the euro zone) because of the desire of central authority in the introduction of new banknotes or change its currency, or which means legal abolition handle currency or old bank paper, which will entail the citizens to replace their old notes in exchange for the new currency that you will ask local authorities to deal them.

The governments when making a decision to cancel a banknote or coin to inform the citizens of this decision and give them a certain period in order to be able to replace the old money new money, and are generally replace the money of citizens for commercial banks way, so that the power to withdraw the old coins fully from the currency bloc.

The reasons for the abolition of money
The government authorities to cancel coin or paper money as a result of multiple reasons may be economic in rates of inflation, or as a Step 2 Wealth result of governments trying to reduce corruption and wealth is legitimate and non-structured economy, as well as to try to prevent and track the financing of terrorist organizations. For example, the 15-nation 2002 agreement on the formation of what is now the European Union, so that these countries had held many of the economic agreement and policy to facilitate trade and facilitate the movement of people, capital and exchange of goods among States the problem of the Union, which include the establishment of a single currency is the euro, which resulted in the cancellation of the official currencies of these countries and replace them with the euro currency, which is now the official currency in the countries that make up the European Union.

Zimbabwe has also process the official currency of the abolition of the country in 2015 as a result of the high inflation rate is alarming what led to the collapse of the value of the currency so that reached the US dollar at a certain stage to Zimbabwe Dollar 2,621,984,228! Therefore it resorted authorities to cancel the official currency in the country and replacing the US dollar and the currencies of some neighboring countries Kalrand South Africa, in a bid to curb inflation and stop the collapse of the currency and the loss of confidence in the local economy.

The process of the abolition of money in India
Knew the last century, several operations to cancel the money in several countries like Russia, Pakistan, Zimbabwe, Australia and several other countries. India is the latest country to have this process and that in November 2016, where India issued a decision to withdraw banknotes from class 500 and Rs 1000 and which constitute more than 70% of the money in circulation in India, something that the impact of international debate between supporters of the Indian Government and between opponents of the process as a result of damage to many citizens and fears of a negative impact on the economy and the lives of citizens.

The Indian government has justified its decision to abolish these banknotes trying to fight tax evasion and non-structured so that the economy will be forced to replace all of the large size to make the source of his money and how to get them, as well as the fight against corruption and gain non-legitimate and illegal trade. According to head of the Indian government, India is also seeking through this step to prevent the arrival of funds to terrorist organizations and gangs smuggling weapons and human trafficking, as “Moody’s” also the Indian government seeks to reduce liquidity and the trend to deal with money non-cash payment and electronic transactions The bank, which makes it easy to keep track of the money and the fight against tax evasion and non-earning legitimate.

Although the rationale for the Indian government that many of those opposed to this resolution so that this process can affect the growth rate of the Indian economy, where the case could be a shortage of liquidity necessary to accelerate development, and declining volume of household spending occur.