The 5000 Malawi Kwacha banknote will go into circulation today.
Reserve Bank of Malawi has told the local media that the bank is ready for the release as it has been conducting sensitization campaigns over the past three months.
According to RBM Spokesperson Ralph Tseka, the bank has reached out to people in rural areas and has also raised awareness about the new bank note through jingles on radios and TVs as well as adverts in the local newspapers.
“The idea was that people should know these features so that they will be able to distinguish the genuine note from a fake one,” Tseka said.
Introduction of the 5000 Malawi Kwacha Banknote was announced in November last year when the bank also announced introduction of an upgraded 2000 Kwacha Banknote.
RBM Governor Dr. Wilson Banda said the bank was following its currency management policy that provides guidance which 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.
“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,” explained Banda.
But former Finance Minister Joseph Mwanamvekha argued last year that higher currency denominations are associated with economies in hyperinflation and that are near collapse.
“Countries with higher denominations are countries that have either economic crisis or their economy is not performing very well,” said Mwanamvekha.
He further said that introduction of K5000 Malawi Kwacha banknote has a potential of fueling tax evasion as well as money laundering in the country.