50,000 won recovery rate nosedives, reports BOK

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50,000 won recovery rate nosedives, reports BOK

The Bank of Korea said yesterday the recovery rate for 50,000 won notes has fallen by nearly half compared to the same period last year.

The central bank said 27.7 percent of all 50,000 won notes in circulation were recovered in the first five months of the year. The rate was 52.3 percent during the same period last year.

From January through May, the central bank printed nearly 5.3 trillion won worth of notes, but was only able to collect 1.5 trillion won.

In the first year the note was printed in 2009, the recovery rate was 7.3 percent. But it quickly picked up and by 2012 hit 61.7 percent. However, the recovery of 50,000 won notes has been falling since. Last year, the central bank was able to collect only 48.6 percent of the currency notes.

The 50,000 won note is the most highly circulated Korean denomination. As of last month, 44.5 trillion won in 50,000 won notes were in the local market. That’s 625.7 billion won more than in April. The central bank estimates 50,000 won notes represent 66.5 percent of all currency in circulation, the highest percentage ever.

There have been growing concerns that many people have been stashing hard currency to prevent authorities from tracking their spending.

The trend started last year after the Park Geun-hye administration announced it would clamp down on tax dodging. This prompted high income earners to try to hide their actual income by cutting back on credit card spending that could expose their actual wealth.

BY lee ho-jeong [ojlee82@joongang.co.kr]

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