AZE.US
Banks in Azerbaijan are increasingly refusing to accept old, worn or slightly damaged U.S. dollar banknotes, causing frustration among people trying to exchange foreign currency.
Economist Khalid Kerimli said the issue is not that older dollar bills are invalid, but that banks may later struggle to resell them to other customers.
According to him, banks usually do not keep foreign currency for long. They buy dollars from one client and sell them to another. If a banknote is old, torn, stained or damaged, the next customer may simply refuse to take it.
“Banks are reluctant to accept old, torn or damaged dollars because it becomes difficult to sell them afterward. A bank does not collect dollars for storage. It buys them from one person and sells them to another,” Kerimli said.
He noted that the situation is different with the Azerbaijani manat. Local banks can accept old or partially damaged manat banknotes and replace them through the Central Bank of Azerbaijan.
There is no similar mechanism for the U.S. dollar in Azerbaijan. The dollar is issued by the U.S. Federal Reserve, not by Azerbaijan’s Central Bank. As a result, Azerbaijani banks do not have an easy or guaranteed way to send old or damaged dollar bills to the United States for replacement.
Kerimli said this is why banks act cautiously and often refuse to accept such banknotes. In practice, they fear being left with cash that will be difficult to put back into circulation.
AZE.US