Demonetisation is the act of stripping a currency note or coin denomination of its legal tender status. This means that once a currency note or coin is demonetised, it will no longer be legal tender and it can no longer be used for trading purposes.
The Reserve Bank of Fiji (RBF) is the only entity mandated to issue and cease the legal tender status of Fijian currency as stipulated in the RBF Act Cap 210 (22) and (26) respectively. Currency being demonetised must be gazetted by the RBF. This constitutes the required legal notice to the public of the withdrawal. Once gazetted, the currency (which are normally the older design notes or larger sized coins) will cease to be legal tender from the date stipulated in the gazette. Generally, the period of withdrawal of old currency from circulation is 3 months.
Why is Old Design Currency Demonetised?
Old design currency is usually demonetised at the time a new design currency is issued. Over time, new design currency, mainly banknotes are introduced to either improve banknote quality, security features or introduce new designs to keep banknotes modern with Fijian themes. Demonetisation assists in eliminating possible counterfeiting of old design notes with obsolete security features.