The Zimbabwean government has promised that they will be introducing higher currency denominations soon. This was revealed by Secretary for Finance and Economic Development, George Guvamatanga at a media briefing organised by Finance Minister Mthuli Ncube.
Government has been criticised for releasing small $5 and $2 notes denominations as part of the new Zimbabwean dollar. This is despite the fact that inflation has taken a toll on the economy means that you need about 3 of the highest denomination to buy a loaf of bread right now.
The money was made a long time ago
Despite empty and stubborn denials, the reason why we have such small denominations is probably that the government planned the return of the Zimbabwean dollar a long time ago. The notes and coins recently released clearly show they were minted/printed in 2018. Back then the bond was still very close in value to the USD and prices were low. So it made sense then, now it doesn’t.
Small coins to be removed from circulation
As part of the process, small coins/notes will be withdrawn from circulation as part of the government’s bid to prevent inflation by excessive printing. This is usually not needed anyway, the Zimbabwean public has a tendency to grow weary of using small notes/coins and automatically discard them without government intervention.
Case in point the 25 cent bond coins were ruthlessly discarded a few weeks ago because they were becoming difficult to handle. Perhaps the government meant to say that it would allow people to exchange those coins for a higher currency as a form of planned demonetisation. That would be welcome.