Central bank out to replace 500/- banknote

The Bank of Tanzania (BoT) said on Thursday the replacement of 500/- banknotes with a coin are expected to be completed before the end of this year, if all goes as planned.

The central bank, however, said once the plans are concluded the sample pictures will be published in various media to inform the public about the changes.

BoT's Director of Banking Supervision Agapiti Kobelo said the new 500/- coin issue was on progress and that the bank has not shelved the plan.

"It could be possible to issue the new (500/-) coin by December," Mr Kobelo told the 'Daily News' on Thursday, noting that issuance of the coin before the end of this year was possible although the delay could be due to the tendering procedures.

He said the main reason behind the replacement is that the 500/- notes is the most circulated denomination among tender bills and therefore subject to easy wear off.

"The 500/- note goes through many hands and gets easily spoilt, but coin is more durable," he said. Early this year, the BoT Governor Prof Benno Ndulu said they have investigated and discovered that the 500/- notes is the main medium of exchange.
"Strange enough, the 500/- bills are not returned to the BoT as frequently as we had expected. That could be the reason for the bill to lose its physical value," said Prof Ndulu.

He said the 2,000/-, 5,000/- and 10,000/- denominations   are being banked more frequently than 500/- and 1000/- bills. "The only way is for BoT to produce coins. Besides, we have not produced new coins for years and the latest such release was the 200/- coins which is the highest valued penny in circulation today," said Mr Ndulu.

According to the BoT monthly economic review of May this year, in total there are 2.15tr/- currency of various denominations in circulation by mid-April compared to 685.5bn/- of same period 2005.
Sources: The Daily News, http://www.dailynews.co.tz, reported by Abduel Elinaza

Share on Google Plus

About Abduel Elinaza

This is a short description in the author block about the author. You edit it by entering text in the "Biographical Info" field in the user admin panel.