SG50 notes: Too much of a good thing?

BT ILLUSTRATION: SIMON ANG
BT ILLUSTRATION: SIMON ANG

SINGAPORE (THE BUSINESS TIMES) - Those SG50 notes that were supposed to be a special edition? Well, there's now too many of them.

Despite the long queues which formed when they were first issued, demand turned out to be underwhelming, or on the flip side of the coin, supply was overwhelming.

BT has learnt that only 40 per cent of the SG50 notes have been issued since they were unveiled last August by the Monetary Authority of Singapore (MAS). Of the 20 million pieces of the S$50 notes and 75 million pieces of the S$10 notes printed, about six million pieces (close to a third) of the former and 32 million pieces (less than half) of the latter have been issued, going by data obtained from MAS.

The Singapore central bank is "exploring with the banks to issue the remaining SG50 notes", said an MAS spokeswoman.

Banks BT spoke to would only say that there has been "great public interest" in the notes, but wouldn't comment on their arrangements with MAS or the amount of notes they were issued or have issued to customers. Privately, industry sources confide that they aren't too keen to accept more notes because not enough customers want them. And those who have the notes can only deposit them over banking counters - adding to the daily queues.

Due to an incompatible cartridge size, SG50 notes are not accepted at cash deposit machines islandwide. For this reason, many consumers and merchants have been reluctant to accept these notes as change, payment or even give them out as hongbao money during the current Chinese New Year period.

The specially designed notes - to mark Singapore's 50 years of nation-building - were launched to much fanfare last year. Lines formed outside participating bank branches hours before they opened for business; DBS Bank put in place an SMS notification system to manage queues while United Overseas Bank provided an online reservation option to allow for later collection. Consumers had to exchange regular notes for the SG50 notes at face value.

MAS also imposed a quota - which was lifted only in December - of five sets of notes (each set comprising a S$50 note and five S$10 notes) per transaction per individual, to ensure that "everyone has an opportunity" to obtain the notes, adding to the perception of the limited supply of the notes.

"Interest may have been overestimated," said Lars Voedisch, principal consultant of PRecious Communications. "MAS was caught between wanting to make a limited period offer - to mark the Jubilee celebrations - and having to print sufficient notes for theoretically everyone."

While commercial brands usually pursue the concept of "limited edition" to spur demand and value, MAS would have had other objectives in mind, such as giving all citizens a stake in the national celebrations, said Mr Voedisch. And most Singaporeans would also agree that the SG50 notes were a worthy undertaking.

Demand for the notes peaked when they made their debut, with the greatest online buzz observed two days after launch when MAS apologised for a spelling mistake in former president Yusof Ishak's name on the accompanying folder and booklet. Since then, the notes have seen an "overall dip" in online conversations - from 349 index points then to virtually zero today, according to media intelligence firm Isentia Group.

Banks said that interest in the SG50 notes revived somewhat in the lead-up to Chinese New Year, but the amount of notes issued was not large. Maybank, one of nine retail banks here from which the public can obtain the notes, said that as with past years, customers started making deposits after the festive holidays, including depositing - over the counter - SG50 notes. And banks typically would return these notes to MAS.

"Almost all the notes issued to the public are kept as mementos. So far, only a very small quantity had been returned to MAS," the MAS spokeswoman said. "The SG50 notes are meant to be a one-off commemorative issue."