While the Reserve Bank of Malawi (RMB) says reports that counterfeits of the newly introduced K2,000 bank note now in circulation should not be cause for worry, an economic commentator has described the development as the major disadvantage of having big currency notes in circulation.
Social media is awash with messages cautioning Malawians to be on the lookout for a fake K2,000 note being circulated by counterfeiters.
But RBM Publicist, Mbane Ngwira, said the risk of counterfeits is always there in currency operations and RBM cannot rule it out completely but only manage it.
He, however, said the security features that are on the new K2,000 note are the latest in the note issuance industry and cannot be easily duplicated.
“You will notice that our know your currency campaign has always been there and is an ongoing process. This campaign is always intensified when a new note is introduced.
“Our call is for all stakeholders to take time to understand those security features and be able to separate counterfeits from real notes,” he said.
Ngwira said if the fake note eludes the eye of traders banks are the first line of defence as people deposit the money.
“We are therefore calling on all stakeholders to be vigilant against fake currencies, not just the new K2,000 but all notes that are in circulation because they are prone to counterfeits,” he said.
But Professor of Economics at Chancellor College, Ben Kalua, said counterfeit money is one of the dangers of having higher currencies in circulation.
Kalua said higher denominations become more profitable to counterfeiters. He said an increase in counterfeit money led the United Kingdom to suppress the circulation of its £50 a few years ago.
“Counterfeiters are not fools. What is important is that we have to be on high alert to avoid being duped,” he said.
Kalua said the introduction of the K2,000 bank note was not strategic but a decision that had to be done to control inflation.
“Malawians were caught unawares but it had to be done,” he said.
The K2,000 note was released into circulation last week. Governor of the Reserve Bank, Charles Chuka, earlier said plans to introduce the new currency were necessitated by the depreciation of the kwacha and rising inflation