Zimbabwe’s central bank will release higher denomination new banknotes it introduced last week to ease the prevailing cash shortages, a senior official said on Friday.
Permanent secretary in the Ministry of Finance George Guvamatanga told a press conference that the higher denominations will result in the gradual withdrawal from the market of the bond coins and smaller denominations of the bond notes currently circulating.
The Reserve Bank of Zimbabwe introduced the surrogate bond notes and coins in 2016, followed by an injection of new 2 dollar bond coin, 2 dollar and 5 dollar banknotes last week.
This is part of the wider monetary reforms that the government is pursuing, which has seen the decade-long multi-currency regime dominated by the U.S. dollar, being phased out in June this year.
Guvamatanga said the higher denominations will be introduced progressively in order to carefully manage money supply in the market.
“There are actually higher denominations that are on the way. “As we bring the bigger denominations, some of the bond notes and some of those coins will start to be withdrawn from the market,” he said.
Guvamatanga defended the introduction of new 2 dollar bond coin alongside the 2 dollar note.
“The reality is that those coins had already been minted, so rather than throwing them away when we have got a shortage of notes, we just decided to bring them so that they will work alongside the new 2 dollar note and 5 dollar note while we bring in the bigger denominations,” he said.
The central bank has said it will drip feed the new notes into the market to avoid fueling inflation. Enditem