Nearly half of Bangladesh’s paper currency notes in circulation are Tk 500 and Tk 1,000 denominations, according to Bangladesh Bank data.

At the end of June, 966.54 crore paper notes were in circulation, worth Tk 3.68 lakh crore. Of these, around 474 crore were Tk 500 and Tk 1,000 notes.

Tk 500 notes were the most numerous, at around 270 crore, worth Tk 1.35 lakh crore. There were also about 203.79 crore Tk 1,000 notes, valued at Tk 2.04 lakh crore.

By comparison, only 52.89 crore Tk 200 notes were in circulation, the lowest among the major denominations, with a total value of Tk 10,578 crore. There were about 117.19 crore Tk 100 notes worth Tk 11,719 crore.

Bangladesh Bank officials said the mix of denominations reflects transaction demand, circulation patterns, durability and printing capacity.

Bangladesh Bank spokesperson Arif Hossain Khan said shortages of paper have sometimes limited the printing of smaller notes, while Tk 10 notes wear out quickly because of their frequent use.

Market participants said higher inflation has also increased demand for larger denominations as consumers need more cash to make everyday purchases. ATMs and large cash transactions at banks also rely heavily on Tk 500 and Tk 1,000 notes.

The use of Tk 1, Tk 2 and Tk 5 paper notes has almost disappeared, while coins of these denominations are also rarely carried. As a result, Tk 10 notes are now widely used for small transactions.

Around 323 crore Tk 10, Tk 20 and Tk 50 notes were in circulation at the end of June. Yet their combined value was only Tk 7,339 crore.

A large number of notes are also old and worn, creating difficulties for users as replacement with fresh notes has not always kept pace.

Khan said the cost of printing banknotes has nearly doubled since the Russia-Ukraine war due to higher raw material, transport and dollar costs. The central bank is therefore encouraging digital payments, including Bangla QR, to reduce reliance on cash.

Bangladesh Bank is required to maintain assets of equivalent value against notes issued under Section 30 of the Bangladesh Bank Order, 1972.

As of June, foreign currency accounted for around Tk 2.97 lakh crore, or 81%, of the assets backing the Tk 3.68 lakh crore in notes in circulation.

Government Treasury bills and bonds accounted for Tk 45,998 crore, while gold and silver were valued at Tk 21,734 crore and Tk 122 crore, respectively.

Other backing assets included around Tk 2,988 crore in short-term loans and advances and Tk 44 crore worth of coins.