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A Model for Optimal Currency Distribution in Iran (in Persian)

Author

Listed:
  • assadzadeh, ahmad

    (Iran)

  • khandan, mehdi

    (Iran)

  • ajalli, majid

    (Iran)

Abstract

Despite the explosive growth of electronic payment systems, banknotes and coins still play an important role in retail payments. Optimal combination of currency has significant impact on cash payment system efficiency and reduces costs of production and distribution of currency. This paper aims to optimize the ratio of each denomination in the combination of banknotes and coins. To achieve this objective, the allocation of banknotes and coins in retail prices of goods and services consumed by households is used inspired by the greedy algorithm in MATLAB software environment. The results show that economy needs more low value currencies. In order to economic performance and to prevent losses a model for optimal distribution, larger note and new denominations issuance have been proposed.

Suggested Citation

  • assadzadeh, ahmad & khandan, mehdi & ajalli, majid, 2016. "A Model for Optimal Currency Distribution in Iran (in Persian)," Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 8(26), pages 499-520, January.
    • Handle: RePEc:mbr:jmbres:v:8:y:2016:i:26:p:499-520
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    More about this item

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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