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Higher denomination notes to be introduced soon – Mthuli Ncube

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By Alois Vinga

A NEW set of Zimbabwean bank notes ranging from $10 to $50 notes will be introduced in a few months’ time to ease cash shortages in the country, Finance Minister, Mthuli Ncube has said.

He made the remarks in one of his media interviews on the sidelines of the 2020 World Economic Forum currently underway in Davos, Switzerland.

“We are injecting cash into the economy electronically in a way that does not contribute to inflation and during the course of the year, we will be introducing higher denomination notes from $10 to $50 notes to make it easy for citizens to transact,” he said.

The treasury boss further said government has since signed contracts with companies to ensure maize deliveries were made on time in order to avert hunger in the country.

Ncube also said government has managed to extend an allowance offer of up to $750 to civil servants in a bid to cushion them from the prevailing economic challenges amid intensified efforts to finance climate proofed agriculture in order to avoid future droughts.

“Investors must believe Zimbabwe because we have maintained our word as seen in the continuous decline of month-on-month inflation which currently stands around 16%,” he said.

However, economist Doctor Prosper Chitambara warned that the move will increase inflation and further destabilise the economy.

“Whichever way the new notes are introduced, since this is an increase in money supply, it will definitely lead to an increase of inflation which will destabilise the markets,” he said.

Owing to the impact of the cash shortages, members of the public have been forced to pay premiums of up to 50% to get their cash from mobile money agents as well as a run-away Zim to US dollar parallel market exchange rate currently at 1:23.

The biting cash shortages have also forced Zimbabweans to use electronic transfers and according to the Reserve Bank of Zimbabwe’s latest statistics, the value of transactions processed electronically increased by 28.5% to close at $30.33 billion in September 2019, up from $23.6 billion registered in August 2019.