Zimbabweans will soon be transacting in new notes following a recent decision by the RBZ to make notes of higher denominations. Currently the two dollar notes have been rendered useless by the high cost of goods.Authorities have approved the introduction, into circulation, of new $50, $100 and $200 banknotes this year. the $50 note will be introduced first, while plans to introduce the other notes are still in the works.Designs of the new $50 note are awaiting the President’s approval before printing can commence.
Zimbabwe has $2, $5, $10 and $20 notes in circulation. Transacting using these notes has become cumbersome, with huge wads of cash now required to complete small transactions due to inflation.Cash shortages have triggered queues at banks and an illegal market where premiums are charged to convert electronic money into cash. The shortages have also created a multi-tier pricing system, where prices of a single product differ depending on the customer’s mode of payment.
The introduction of the new notes is expected to enhance convenience to the transacting public and eliminate the illegal cash market.Stability of the Zimbabwe dollar over the last six months has reinforced authorities’ confidence that the value of the new notes will not be wiped away by inflation.Inflation has been falling gradually since mid-last year, following a raft of interventions by authorities to protect the value of the local unit from speculative behaviour in the market.Currently, around $1,4 billion in cash is circulating, up from around $400 million a year and half ago.