By Staff Reporter/Agencies
THE Reserve Bank of Zimbabwe (RBZ) is expected to introduce a new set of higher denomination banknotes worth $600 million to increase the physical money supply and curb severe cash shortages in the country.
Eddie Cross, a member of the RBZ Monetary Policy Committee (MPC), confirmed this saying authorities had approved the introduction of $10 and $20 banknotes.
He said designs for the new denominations have already been approved, while printing was underway.
“The plans are advanced and higher denomination notes will be made available to the public sometime later this month,” said Cross.
“The Reserve Bank will make the announcement. They (the notes) are being printed and the appropriate date will be announced soon.
“We had a meeting yesterday (Friday) of the MPC and the Governor (John Mangudya) confirmed to us that the roll-out will be in stages. So, it won’t be a full range of notes initially, but it will only be higher denomination notes.”
He said banks will be required to exchange their electronic balances for physical cash to ensure that no new money is created.
“We are moving cautiously because we don’t want to disturb the monetary balance and we are insisting that banks pay for the currency when they draw it so that there is no money creation,” he said.
“We are now taking steps to start implementing that. We started in September last year when we had about $500 million worth of notes in circulation and now we have between $1,3 billion and $1,4 billion notes. This will take it up to $2 billion. Our target is $3 billion, which amounts to about 10 percent of our money supply.”
RBZ deputy governor, Kupukile Mlambo, refused to comment on the issue saying it was “sensitive”.
Last December, President Emmerson Mnangagwa announced new 10 and 20 Zimbabwe dollar notes will be introduced “within a few days” to contain persistent cash shortages.