By Patrick Kagenda
Bank also plans to make all notes the same size and with similar features
A senior source in government has told The Independent that Bank of Uganda is introducing a Shs2000 currency note soon.
The source said the new note is part of a plan by the central bank to completely change the appearance of the currency notes.
Speaking on condition of anonymity, the source said the Bank also plans to homogenise all notes by making them the same size and with similar features. The new notes will have improved features designed to make them harder to counterfeit.
The source said the Shs2000 note has been kept secret even within the Currency Department until the official announcement by the bank is made. Some officials in other departments of the central bank, the source said, do not yet know about it.
The Bank of Uganda Director of Communications Juma Walusimbi denied knowledge of the plan to issue the Shs2000 currency note. “I have no idea about it,” he said.
But he confirmed the bank is involved in a major clean up of the old currency notes and replacing the old dirty notes with clean notes.
He said this is done routinely and the clean notes in circulation are not new currency as people are saying. “Whenever we are introducing a new currency we inform the public,” said Walusimbi. He did not say whether the new clean notes will contain improved features, as some sources had suggested but he added:
“We are issuing clean notes from our stocks to guard against counterfeits and to promote the culture of keeping money notes clean. People should keep money notes clean so that they are not rejected by machines and all the dirty notes should be banked.”
He said the clean notes are not only healthy for human handling but also for the Automated Teller Machines (ATMs) because the new notes do not jam the machines. Dirty notes spoil ATMs by causing machine jamming.
Another source said: “The central bank could possibly be increasing money in circulation in preparation for next year’s election.
Each dirty note they pull out, they replace it with two new ones. This would be the best time considering the fuel price hikes. They could use the fuel hikes as being behind the inflation the new notes would cause. The good thing about this inflation is that its cause is from the money supply side and not from the market demand side.”
However another senior official in the banking sector dismissed this view, saying money cannot be released unless there is a trigger somewhere. “It only occurs when government is paying or when there is a release from somewhere,” the source said.
The source could not rule out the introduction of a new Shs2000 as the Shs1000 notes have reduced in circulation because it’s rapidly losing relevancy following the declining value of the shilling against the dollar.
“They could be planning to introduce a Shs2000 note because the Shs1000 notes are few in circulation. We now have more of the Shs500 in circulation,” said the source.