The Reserve Bank of Zimbabwe (RBZ) has revealed that the new banknotes which are set to be released today have very poor security features. Because of this, the monetary authorities will only be releasing $2 and $5 bond notes because they are worried that counterfeiters will take advantage of the poor security if they produce notes with bigger denominations. In addition, the central bank is also supplementing with a $2 bond coin which was minted in 2018.
According to the state-controlled Sunday Mail, this startling information was revealed by economist and member of the RBZ Monitory Policy Committee, Eddie Cross. Speaking at a press conference, Cross said
“The primary objective is to bring sufficient cash into the market, to do away with queues at the banks and ATMs and to bring cash into free supply without any premium. The new cash which will be introduced next week (this week) and will be sold to commercial banks on a 1:1 basis for RTGs dollars. There will be no impact on money supply or inflation. We are not creating new money, we are replacing existing money with cash — so it won’t have any impact on the national macro-economic fundamentals.
If this injection is not enough to solve the problem, we will introduce more currency. The reason for the relatively small notes — the $5 and $2 notes and coins — is because we were concerned about the security features. The security of these notes is not adequate and if we introduce a higher value note there will be counterfeits notes produced.”
RBZ governor John Mangudya however reassured the public saying that they should not panic as the central bank has everything under control. Mangudya said,
The fears that people are expressing on social media are a legacy of the hyperinflation era, but we assure them that there will be no repeat of that because there will be no increase in money supply; there is absolutely nothing to fear.