Zimbabwe’s new bank notes

Freshly-printed new Z$10 and Z$20 higher denomination bond notes to be delivered, which the central bank says will go into circulation at the end of the month.

The RBZ announced last week that Z$10 and Z$20 bond notes were being printed to complement the Z$2 and $5 notes which have become valueless as the inflation-hit currency continues its side.

Sunday Mail newspaper reported last week that the Reserve Bank of Zimbabwe has approved the introduction of Z$10 and Z$20 banknotes worth close to Z$600 million “to increase physical money supply and curb cash shortages.”

Currently, the RBZ says Z$1.4 billion in cash is circulating, and the higher denominated notes will increase this to about Z$2 billion.

Zimbabwe has Z$2 and Z$5 notes, and Z$1 and Z$2 coins, available for use which make money exchanges awkward, with little exchanges currently requiring the conveying of gigantic wads of notes because of expansion which hopped to 676.39 percent year-on-year in March.

Money deficiencies have activated long lines at banks and a flourishing unlawful forex showcase where premiums of up to 40 percent are charged to change over cash held in the bank into money.

What’s more, money deficiencies have prompted the making of a multi-level valuing framework, where costs of a solitary item contrast contingent upon the client’s method of installment.

Eddie Cross, a member of the RBZ’s Monetary Policy Committee, said banks will be required to exchange their electronic balances for physical cash to ensure that no new money is created.

“We’re moving cautiously because we don’t want to disturb the monetary balance and we’re insisting that banks pay for the currency when they draw it so that there’s no money creation,” Cross said.

“We’re now taking steps to start implementing that. We started in September last year when we had about Z$500 million worth of notes in circulation and now we have between Z$1.3 billion and Z$1.4 billion notes. This will take it up to Z$2 billion. Our target is Z$3 billion, which amounts to about 10 percent of our money supply.”

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