SARB Maintains Denominational Mix

The South African Reserve Bank (SARB) has recently commented about options for its denominational structure, following ‘fake news’ that it is planning to introduce a new high denomination R500 note and R10 coin.

The highest denomination is the R200 but there is no pressure to introduce a higher value note given that the R100, rather than the R200, is the most used note. The R200 is fulfilling a store of value function. Between March 2020 and June 2021, there were an average of 307.3 million R200’s and 776.6 million R100’s in circulation.

A SARB study has concluded that there is an economic case to issue an R10 coin, but that the public is not keen on the idea. The current highest denomination coin is the R5.

Public perception, along with the buying power of the rand and general inflation trends, is an important factor in the decision for change.

SABN and SA Mint hit targets

Separately, SARB has published its Annual Report for 2021/22. Its subsidiaries producing banknotes and coins (South African Banknote Company and the South Africa Mint respectively) fulfilled 100% of annual order requirements, although there were disruptions due to COVID-19 which resulted in an increase in production costs of 14%.

Just over 1 billion notes were produced by SABN, which returned a net profit of R278 million, compared with R84 million the previous year. During the year, it invested in two BPS X9 high speed single note inspection systems from Giesecke+Devrient.

South African Mint delivered 800 million coins. It retuned a net profit of R777 million, compared with R672 million the previous year.

The value of noes and coins in circulation was R171 billion, up from R168 billion in 2021.

SARB also also stated that reported counterfeit notes are within the threshold. The target was a ratio of 12ppm, whilst the actual ratio was 5.01 ppm, down from 5.6 ppm the previous year.