The Bank of Tanzania (BoT) plans
to issue 500/- coins, to replace the
current notes which wear off
easily.
Addressing journalists in Arusha, the Central Bank Governor, Prof Benno Ndulu, said the decision follows
complaints from people regarding the weakness
of the green 500/- bill.
"Coins are more durable with longer life-span of seven years.
Banknotes need to be renewed every seven months," said Prof Ndulu, adding that because of a wider circulation, the 500/-
note goes through many hands and gets easily spoilt.
"We have
investigated and discovered that the 500/- banknote is the main medium of
exchange," stated Prof Ndulu.
According to the BOT governor, banknotes go into circulation for an average of seven months before
starting to wear-off, after which they are collected and destroyed at the BOT
base in Dar-es-Salaam.
"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/- notes.
"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 range which is the highest valued penny in circulation today," said
Mr Ndulu.
The BOT governor also said that the Central Bank continues to
honour 5 cents, 10 cents, 50 cents, 1
and 5 shillings coins."They are all
legal money and people and especially traders should find ways of putting them
into use," stated the BOT governor.
Minister for Finance and Economic Affairs Mr Mustafa Mkulo said
Tanzanian currency would be valid in Kenya, Uganda, Rwanda and Burundi from
January 2013, in line with the East African Community Monetary Union
protocol.
"The ultimate goal is for the five EAC member states to use a single currency. We are preparing a
Memorandum of Understanding to that effect," said Mr Mkulo.
Mr Mkullo who was speaking
during the just ended EAC conference on financial sector integration in the
region added that the heads of state are expected to sign the protocol
during their forthcoming summit
meeting in December.Tanzania, Kenya and
Uganda use the shilling while Rwanda and
Burundi use Francs.
Source: The Daily News,www.dailynews.co.tz, reported by Mark Nkwame in Arusha
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