2014-02-25
V. Vasiliauskas: challenge for distribution businesses — appropriate acquisition of euro banknotes and coins
With the adoption of the euro in Lithuania, over the first two weeks, when it will still be possible to pay also in litas, the amount of cash in circulation might increase several times, while the number of settlements — by about a fifth.
Such projections were presented today by Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania, at a general meeting in Vilnius of members of the Association of Lithuanian Trade Enterprises. According to him, appropriate acquisition of euro cash is one of the main elements necessary for smooth transition to the new currency, while one of the most important links in this process are retail enterprises.
“It is essential that trade enterprises as accurately and as early as possible assess euro cash needs and cooperate very closely with banks, from which euro coins and banknotes will reach retailers and later — their customers”, says V. Vasiliauskas.
During the euro and litas dual circulation period, which will last 15 days after the euro adoption, trading and service enterprises will require more cash than usual, because, in settlements in cash litas, change will have to be given in euro only, except at automated trading (service provision) locations, public transportation and taxis, where change will be provided in litas if needed. In addition, trade enterprise might become “money exchange places”, especially where there are no banks or post offices nearby.
According to the planned schedule, the Bank of Lithuania will begin the primary distribution of euro to commercial banks 3months before the euro adoption, while banks will begin distribution to their customers, as well trade enterprises — 1 month before euro adoption.
A simplified euro distribution procedure will be applied to small trade and service enterprises, i.e. enterprises that employ less than 10 people and the annual revenue of which, or total annual balance, does not exceed EUR 2 million. These enterprises will be provided with euro cash by banks 5 days before the euro adoption.
The euro distribution issues will be regulated by the regulations for the frontloading of euro banknotes and coins, which is prepared by the Bank of Lithuania and is planned to be announced this summer. Among other things, this document will include the template for the agreement between banks and their customers and the secondary euro frontloading standard form (for small trade and service enterprises).