Democratic Progressive Party (DPP) spokesperson on Finance Joseph Mwanamvekha says the DPP administration wanted to introduce 5000 Malawi Kwacha banknote but dropped the plan after realising that it was not good for Malawians.
Mwanamvekha who served as Minister of Finance during the DPP administration made the remarks at Parliament yesterday.
He said it was DPP that brought the issue of introducing the 5000 Malawi kwacha banknote but after doing some research the DPP administration dropped the plan because it could have affected the economy of the country as well as the lives of people.
“Of course, we looked at it but when we analysed the impact of it. We looked at countries that have higher notes and we noted that we were not in similar situation. So, we thought at that point it was not good for Malawians and also the currency itself that’s why we stopped it, but the discussion indeed took place but we stopped it because to us it was not a good development,” said Mwanamvekha.
In 2016, the DPP Government introduced the K2000 note. In 2017, the then Minister of Finance Goodall Gondwe announced plans to introduce a K5000 banknote and said the move would cost K5 billion.
On Tuesday this week, Reserve Bank of Malawi Governor Dr. Wilson Banda said the new banknote will be released on Thursday 24th February, 2022 and will cost Malawi K1.4 billion.
He added that currency management policies states that 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. But buyers will need one K5000 note to settle a K4000 bill instead of requiring two K2000 banknotes. Portability was also considered as we all know that currency has to be easily and economically carried from one place to another.
“Lastly, the enormous pressure on demand for K2000 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.