Lilongwe — Government says it plans to introduce a K5, 000 banknote, a development it says will lift the burden of people carrying a large number of banknotes when buying a single item.
Minister of Finance Economic Planning and Development, Goodall Gondwe, revealed the news in an interview with Malawi News Agency (Mana) at Capital Hill in Lilongwe on Monday.
Normally when a bigger banknote is introduced, people associate the development with increase of
prices of goods to follow. However, the minister says it is not true that when that happens then the prices of goods will go up on the market.
"It's very true that the Ministry of Finance is pushing for the production of K5, 000 bank notes soon.
"It costs eight million dollars (about K5.8 billion) for ordering new bank notes, and it is a lie that when we come up with this new bank note then we will have prices of goods on the market increasing," Gondwe said.
He further explained that Malawi is one of the few countries in the SADC Region with the least banknote giving an example of neighbouring Tanzania, which he said has a 10,000-shilling banknote while beyond SADC the banknote for Uganda is even higher."
"If we continue in the situation we are in now without coming up with a higher banknote, then we [will] continue losing a lot of billions for replacement of the denominations.
"It is also laborious to carry a huge bag with money just to buy one item, but with this new note it will become simpler," he said.
According to the minister, even the replacement of old banknotes costs a lot of money, let alone when you need to replace a lot of old but smaller banknotes.
In speaking about introduction of the new bank note, the minister was reacting to rumours from certain quarters about government's impending introduction of the K5, 000 banknote into its circulation.
Presently, the biggest banknote in circulation is K2, 000.