New currency exchange service: Rare small denominations

The demand for exchanging small denominations of money increases during the Lunar New Year, but the availability of small bills is limited. The familiar "money exchange kiosks" are also gradually disappearing from this service.

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In Hanoi, Quang Trung street (Ha Dong district) used to be known as the “small change exchange” street. Every Tet holiday season, dozens of money exchange booths would gather here, stretching from the Ha Dong Post Office area to the Ba La intersection, with denominations ranging from 500 dong to 20,000, 50,000, and 100,000 dong. The common exchange rate was “10 in 8” or “10 in 9” depending on the denomination, equivalent to receiving 80,000 – 90,000 dong of new currency for 100,000 dong exchanged.

Bustling online market

In previous years, about 10 to 15 days before Lunar New Year, the money exchange booths were crowded with customers. However, according to reporters’ observations, on January 30th, there was no longer any money exchange activity on Quang Trung street (Ha Dong district) as in previous years. In some other streets around Hoan Kiem Lake (Hoan Kiem district), the money exchange service was also gradually disappearing.

“Nowadays, with the development of social media, the money exchange activities have been moved to online platforms, making the transactions more convenient” – said a person who has been in the money exchange service for many years.

The Quang Trung street area (Ha Dong district, Hanoi) is no longer bustling with small change exchange activities. Photo: MINH CHIEN

On the Fanpage of residents in an apartment building in Nam Tu Liem district (Hanoi) with tens of thousands of members, a Facebook account named L.N posted an advertisement for exchanging new currency with attractive offers: “Exchange early, very favorable fees”. According to the advertisement, the fee for exchanging new currency with a denomination of 200,000 dong is 2%, and for 100,000 dong is 3%. For smaller denominations such as 50,000, 10,000, and 5,000 dong, the fee will be higher, ranging from 6% to 7%. In the role of someone in need of exchanging money, we contacted the account owner L.N, who informed us that this year, due to a scarcity of new currency, only those who exchange early will receive the low fees as announced. As Tet approaches and the source of new currency diminishes, the fee for exchanging will increase.

Some online groups advertise for small change and new currency exchange, with the condition that customers have to deposit 20% – 50% of the amount to be exchanged. However, due to concerns of being scammed, not many people choose this service. “To feel secure, I seek acquaintances, friends, or residents in the same apartment building to meet in person and exchange money, minimizing risks” – said Ms. Nguyen Thu Ha (Cau Giay district, Hanoi).

Small change exchange on social media platforms is currently vibrant

Similarly, when contacting a service specializing in exchanging new currency and a gold shop in Ho Chi Minh City, we also received information that there is less small denomination currency and the fees for exchanging are higher than usual this year. The common fee range this year is 3% – 15% depending on the denomination, with the highest fee applicable to 20,000 dong bills.

Banks also lack new small denomination currency

On January 30th, at a branch of a commercial bank in District 1 (Ho Chi Minh City), Ms. H., a loyal customer of this bank, was waiting to exchange for new currency. Bringing 35 million dong, she wanted to exchange for denominations of 10,000, 20,000, and 50,000 dong bills. However, the bank staff informed her that they only had 50,000 dong bills in limited quantities, and there were no smaller denomination bills. As for larger denominations such as 100,000, 200,000 dong… there were still plenty. “The bank provides support for customers to exchange for new small denomination currency as a celebration for Tet, completely free of charge. In previous years, there were enough small denomination bills, but this year 20,000 dong bills are extremely rare” – explained a staff member of this branch.

An online platform for small change exchange. Photo: Le Tinh

Notably, even the 100,000 dong bills are scarce this year. Ms. H. stated that her colleagues have contacted many other bank branches, but they were unable to exchange for this denomination, so she will help her colleagues at this branch.

In discussions with reporters from Nguoi Lao Dong Newspaper, staff members from various banks stated that only State-owned bank branches at the provincial and city levels, as well as credit institutions, are allowed to exchange currency that does not meet circulation standards. Any act of exchanging currency for personal or organizational gain via online platforms violates the law and must be stopped and strictly handled” – emphasized Mr. Lanh, Deputy Director of the State Bank branch in Ho Chi Minh City.

According to Mr. Nguyen Duc Lanh, Deputy Director of the State Bank – Ho Chi Minh City branch, to meet the demand for payment, circulation of goods, and currency at the end of the year, which tends to increase, the State Bank always directs State-owned bank branches at the province and city levels, as well as credit institutions, to ensure the supply of adequate cash – both in quantity, structure, and quality.

“Only State-owned bank branches at the province and city levels, as well as credit institutions, are allowed to receive and exchange currency that does not meet circulation standards. Any act of exchanging new or small denomination currency by individuals or organizations for personal gain; or conducting currency exchanges online, is in violation of the law and must be prevented and strictly handled” – Mr. Lanh emphasized.

Moreover, even 100,000 dong bills have been scarce this year. Ms. H. stated that her colleagues have tried to contact many other bank branches, but were unable to exchange for this denomination, so she will help her colleagues at this branch.

SOURCEcafef
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