Let us get the facts out of the way first. South Africa, just like a lot of countries including the United States is grappling with increased inflation and other economic woes. In Zimbabwe, such issues were accompanied by rampant money printing in Zimbabwe which is why a lot of social media users in Zimbabwe have been claiming that South Africa is on the verge of introducing a new R500 to supplant the current R200 note as the biggest note in circulation. Only it is not true. The South African Reserve Bank is not on the verge of introducing a R500 note.

The results of the (latest) study revealed that South Africa is not ready for a R500 banknote and some of the reasons stipulated were that the introduction is only valid when the highest denomination, R200 in our case, is the most circulated banknote.

This is however not the case in South Africa as the R100 denomination is the most circulating banknote. The other reason is whether the R200 is still used as a store of value – which it is – and therefore does not warrant a change

South African Reserve Bank on the issue of the R500 note

The R500 note is not needed

As already noted above, there is little use case for the R500 note. The R100 note remains the most widely used note in the South African economy with about 776.6 million of these notes in circulation compared to the 307.3 million R200 notes. This is because even though in absolute (USD) terms the Rand is worth much less than say the US$100 it still has a lot of purchasing power parity in South Africa thanks to the fact that a lot of what the local population needs is manufactured locally. The ordinary person does need large notes because most of their needs can be met by the smaller notes.

The image of the supposed R500 note has already been dismissed as fake by the South African Reserve Bank. They issued a dismissal back in 2009! That is just how old the image is. Peddlers of fake news often repurpose such images and attach new lies to them. Back then the lies were spread in the form of email chains. Nowadays fake news is being spread in the form of WhatsApp messages. In all cases, it is hard to pin down the origin.

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