Zimbabwe will start issuing its higher denomination notes next week, the Reserve Bank of Zimbabwe (RBZ) has said.
The first notes to be availed to the public will be the $10 notes on Tuesday 14 May, while the $20 notes will be released in the first week of next month as the monetary authorities continues with its ‘drip feed’ system.
But despite an RBZ warning over currency manipulation, a survey carried out by Inside Business showed that the general public is rather skeptical and anticipate the new notes to flow into the illegal foreign currency market
Said RBZ Governor Dr John Mangudya:
“(T)he $10 and $20 dollar banknotes issued on 14 May 2020 through Statutory Instrument 103A of 2020, will come into circulation as follows: The $10 banknote will commence circulating on Tuesday 19 May 2020; and the $20 banknote will be in circulation by the first week of June 2020.”
In line with the introduction of the higher denominations, the apex bank has moved to increase withdrawal limits for individuals from $300 to $1000.
“The bank also advises that it has revised withdrawal limits upwards from $300 per week to $1000 per week with effect from 19 May 2020.
“Banks have been directed to ensure that the withdrawal limits are strictly observed. The Bank will not tolerate any abuse of currency and will decisively deal with any such abuse in terms of the law.”
Over the last couple of weeks a video has been circulating on social media of an illegal foreign currency dealer bragging with several bunches of newly minted $5 notes.
Prior to the introduction of the $10 and $20 notes, the $5 note was the biggest denomination.
Currency manipulation is a huge problem in the country, with the black market rate at over 50 to the United States dollar, while the interbank rate continues to be pegged at 25 to the US dollar.
Currency reforms in the country reached a crescendo last June when the fiscal and monetary authorities re-introduced the Zimbabwe dollar, a move that ended a multi-currency system that had been in place since 2009.
It was the latest in a number currency moves that the Zimbabwean Treasury and the RBZ had implemented over the preceding months.
The RBZ’s February 20, 2019 Monetary Policy Statement announced that dollar balances held in local Foreign Currency Account (FCA) bank accounts and mobile payment platforms, as well as bond notes and coins, would no longer be regarded as equal in value to United States dollars.
Announcing the MPS, central bank governor Dr John Mangudya also said local dollar electronic balances and bond notes and coins would become ‘RTGS dollars’, part of Zimbabwe’s multi-currency system and trading at an exchange rate fixed by market forces.
The MPS also announced the introduction of an inter-bank market would be established for trading RTGS dollars with foreign currencies on a willing-seller willing-buyer basis.
In 2018, the central bank had moved to separate local RTGS accounts and Nostro accounts