eBusiness Weekly
Oliver Kazunga
ECNOMIC commentators say the introduction of the $100 note that is imminent will not fuel inflationary pressures but will foster convenience to the transacting public.
The Government in a notice gazetted Tuesday this week, said the $100 note will be introduced, as are all currency notes, in terms of the RBZ Act.
The Reserve Bank of Zimbabwe (RBZ) has not specified the date for the introduction of the new note.
In an interview, the Zimbabwe National Chamber of Commerce (ZNCC) chief executive officer Christopher Mugaga said the forthcoming $100 note will not have any impact on the economy in inflationary terms.
“I think it will not have any impact on inflation because money supply stokes inflation and not the denomination.
“In terms of its impact to the operations business, there is no impact since businesses handle large transactions that are done electronically or the use of plastic money. The $100 note is being introduced just to promote convenience to the public by reducing the wades of cash they have been subjected to handling,” he said.
The note will be brown in colour and follow the general front design of Zimbabwean currency with the three balancing rocks of the RBZ and with the particular note design on the back being the Great Zimbabwe monument and a baobab tree.
There are the usual security features with the visually impaired recognition feature on the front to the left, latent image showing the denomination, windowed security strip inscribed “RBZ” with colour shift from red to green.
The watermark has the highlighted inscription “RBZ” and see-through of the Zimbabwe Bird looking to the left in perfect register, as secondary features.
And on the back the security features include a gold-coloured iridescent band showing the denomination of the note and see-through of the Zimbabwe Bird looking to the right.
The banknote remains 156mm by 66mm as with the other denominations.
National Consumer Rights Association spokesperson Effie Ncube said the impending introduction of the $100 note signals that the local currency is losing value with a knock-on effect that consumers now need more money to buy what formerly needed less.
“The imminent introduction of the 100-dollar note is a sign that the Zimbabwean currency is losing value. This means more and more money is needed to buy what previously needed less. “This means goods and services are more expensive than before,” he said.
He said printing more money risks driving inflation higher and further weakening the currency.
“The long-term solution is to address the inflationary pressures and what is eating away the Zimbabwe dollar purchasing power.
“Once the currency value has stabilized, there won’t be any need for more and more higher denominations,” said Ncube.
Month-on-month inflation after scaling up now appears to have started decreasing with the month-on-month cost of living receding from 6, 99 percent in February 2022 to 6,31 percent in March 2022.
However, last month’s figure is still higher than that of March a year ago, and thus the annual inflation rate spiraled from 66,77 percent to 72,70 percent.
An economic analyst Farai Mutambanengwe added his voice adding that the introduction of a $100 note, which is a direct response to the obtaining inflationary pressures was inevitable.
“Obviously, the introduction of the $100 note as a higher denomination in our local currency is a response to inflationary pressures and the loss of purchasing power and it was inevitable. The higher denominations are not going to cause inflationary pressures as long as the Reserve Bank does not print more money,” he said.
Meanwhile, RBZ Governor Dr John Mangudya has said the new $100 notes will not be inflationary, rather improve convenience for the transacting public as the use of small-value denominations has been rendered more cumbersome by inflation.
The bank notes are essentially small change and hardly used any more for shopping where mobile and plastic money now dominate as Zimbabweans get out of the cash habit, but they are needed for things like bus fares and other small transactions.
