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Reserve Bank of Malawi disputes K10,000 rumour

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The Reserve Bank of Malawi (RBM) has trashed and described as fake, news that it intends to introduce a K10, 000 note.

Social media was awash with news that the central bank intends to introduce the note ahead of an alleged another 25 percent devaluation of the local currency to please the International Monetary Fund for a possible Extended Credit Facility consideration.

But in a statement RBM Governor Wilson Banda says the central bank has no intention of issuing the said banknote any time soon.

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The statement adds that there are a number of conditions which the reserve bank considers before introducing a higher banknote which have not been met.

“One trigger point, amongst many others, for issuance of a higher banknote, is when the highest value denomination exceeds 60 percent of the total value of currency in circulation. This condition has not yet been met as the ratio is currently at 26 percent,” reads the statement.

The highest note in Malawi is K5, 000 which is equivalent to approximately $5. It was introduced in November last year.

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The central bank governor defended the move to introduce the K5, 000 note indicating that the bank was responding to the currency management policy that guides it on how to react to economic developments.

Banda indicated that at that time the highest value denomination, which was K2, 000, exceeded 60 percent of the total value of currency in circulation and it was hovering at 80 percent and the demand for the highest note was huge.

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