The Zimbabwean government has been urged to issue banknotes with higher denominations to make transactions easier for citizens.
This comes as inflation continues to soar in the southern African country, severely eroding the value of the current highest denomination of $100.
According to statistics from the Zimbabwe National Statistics Agency, month-on-month inflation rose to 15.7% in May 2023 from 2.4% the previous month. Year-on-year, prices increased by 86.5% in May compared to 75.6% in April.
While official figures show blended inflation spiked in May, the actual inflation rate experienced by the majority who earn local currency is likely higher.
In its monthly economic review report, the Zimbabwe Coalition on Debt and Development (Zimcodd) said higher denomination banknotes are now urgently needed.
“These will help increase the public’s transacting convenience which is key in building market confidence,” Zimcodd said.
The local currency, the Zimbabwe dollar, continues to plummet against the U.S. dollar, losing nearly 40% of its value on the parallel market in May alone. Year-to-date, it has depreciated by 73%.
Zimcodd blamed the excessive liquidity growth in the economy caused by the RBZ paying for foreign currency surrendered by exporters and tobacco farmers, as well as uncontrolled government spending.
The group recommended that the government adopt accrual accounting to properly assess its financial position and inform better fiscal decisions to avoid misallocation of resources.