Is South Africa ready for higher denomination coins and bank notes as…the Reserve Bank discusses the option of having R500 note and a R10 coin

Following a new study, The South African Reserve Bank discusses the option of having R500 note and a R10 coin.

This comes as the cost of living and inflation continues to rise hitting many South Africans in their pockets.

Recent debate has been about whether or not to introduce higher denominations of both notes and coins.

Speaking to Business Tech, the Reserve Bank says it constantly carries out research to determine whether or not to transition to higher denomination coins and bank notes.

“The results of the (latest) study revealed that South Africa is not ready for a R500 banknote and some of the reasons stipulated were that the introduction is only valid when the highest denomination, R200 in our case, is the most circulated banknote…This is however not the case in South Africa as the R100 denomination is the most circulating banknote. The other reason is whether the R200 is still used as a store of value – which it is – and therefore does not warrant a change,” the bank said.

While the Reserve Bank assessed that there is an economic basis for launching a R10 coin, there is no appetite from the South African public.

The reserve bank evaluates the rand’s purchasing power, the general trajectory of inflation, and public perception before switching to new denominations.

Recent data shows that the R100 note is the most favoured bank note, with an average of 776.6 million banknotes in circulation outside of the SA Reserve Bank between March 2020 and June 2021.

R200 note follows with an average of 307.3 million banknotes in circulation during the same period.

Source: Businesstech