LILONGWE-(MaraviPost)-President Lazarus Chakwera’s Tonse government has introduced MK5,000 banknotes effective February 24, 2022.
The Reserve Bank of Malawi (RBM) has confirmed the development that the banknote will be in circulation next year on the market
RBM Governor Dr. Wilson Banda told the news conference on Tuesday, November 23, 20231 that the introduction of MK5,000 high bank note results from the bank’s response to its own currency management policy that provides guidance on how to react to various economics developments and some other important reasons.
“According to currency management policies, the high banknote in the economy should not account for more than 60 percent of the total value of currency in circulation. As it stands, the old K2000 banknote has exceeded over 80 percent in currency circulation hence the need to introduce a higher banknote.
“Buying commodities will now need one MK5000 note to settle a MK4000 bill instead of requiring two MK2000 banknotes. Portability was also considered as we all know that currency has to be easily and economically carried from one place to another,” justifies Banda.
The governor added, “Lastly the enormous pressure on demand for MK2000 signifies that the banknote is being used for transaction purposes instead of being a store of value as should be the case for higher denominations. This therefore, calls for a higher denomination banknote to act as a store of value,” explained Banda.
He also highlighted the reasons behind the introduction of the upgraded 2000 Kwacha banknote and this include, making MK2000 banknote more secure by including modern security features and the replacement of the image of the Malawi University of Science and Technology at the back of the note with an image of Blantyre Magistrate Court which represent the urgent need for the country to fight corruption.
The Central bank will use MK2.8 billion for the Introduction of new bank notes MK5000 and MK2000 upgrade.