Zimbabwe introduces new cash circulation but effectiveness remains uncertain

The Reserve Bank of Zimbabwe new sets of notes and coins on Tuesday as part of monetary measures to increase the level of physical cash in circulation in the economy that has been hit hard by a liquidity crunch.

The new notes and coins come in the form of a $2 note, $5 note, and $2 coin, and will circulate alongside the identical and existing two-dollar bond note and five-dollar bond note that were introduced as a surrogate currency to the US dollar in 2016.

Reports from the state media say that the central bank pumped $30 million worth of new notes and coins on Nov 12, the first tranche of $1 billion worth of the new money that planned to be injected into the economy within the next six months.

Economic experts said the new money could provisionally ease cash shortages, but they were of not much value and would eventually fuel inflation.

The public welcomed the injection of the new notes and coins but many have bemoaned the $300 cash limit per week that a person can access from the bank.