You saw it here first!
Banco Central do Brasil announced yesterday that it will release its new banknote of 200 reais (BRL200.1) on Wednesday September 2.
Several political parties had petitioned the Brazilian Supreme Court to order Banco Central do Brasil to suspend its release alleging that issuing this note will help tax evaders, drug dealers and other criminals hide their “black” money by requiring less space to hide it.
Obviously this was a purely political move to embarrass the government. The value of this banknote at the official rate is about $36.00. There are five banknotes expressed in dollars and euros worth more that 36 dollars, which are more suitable to that end.
When it comes to issuing large denomination banknotes there is a struggle between Central Banks which know and care about the cost of printing and handling and storing currency, and do know that larger notes will reduce operational expenses and make transactions easier; and politicians which feel that issuing them is acknowledging inflation.
Venezuela is an example of this way of thinking (or lack thereof) as their largest note of 50,000 bolívares soberanos (VES50,000.1) is equal to 16 U.S. cents.
(Cleophas Schockem has contributed to this article.)
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