Pakistan (Commonwealth Union)_ In a significant development, the State Bank of Pakistan (SBP) announced its plans to issue new currency notes equipped with international security features. The central bank’s governor emphasized that this transition would not lead to a disruptive overhaul but rather a strategic enhancement. The SBP governor stated, “The new notes will be printed with an international security feature. The notes will have new serial numbers, designs, and high-security features”.
Also read: MALAYSIA: THE UPCOMING MANUFACTURING AND SERVICES DESTINATION
Providing insights into the timeline for the availability of these new notes, he mentioned that the design framework was already in progress, expressing hope that it would be finalized by March. Importantly, he reassured that the transition would not mirror the abrupt demonetization witnessed in India a few years ago. Notably, India’s demonetization in 2016 stirred significant social unrest and temporarily impacted the GDP. However, it paved the way for sustained high single-digit economic growth as digital transactions gained prominence, leading to muted inflation and mid-single-digit interest rates.
Also read: UBER EATS COMPLETES FIVE YEARS IN SRI LANKA!
Sources familiar with the matter disclosed that the SBP is contemplating this move in response to concerns about counterfeit currency circulating in the market. Khurram Schehzad, CEO of Alpha Beta Core financial advisory firm, regarded the introduction of currency notes with enhanced security features as a positive development, though he cautioned against premature assessments. Addressing the notion that this move would tackle the issue of black money, Schehzad emphasized that true success would require measures to “cancel out” or reduce higher denomination currency notes in circulation. Highlighting the importance of assessing the cash hoarded by the public, Schehzad pointed out that, amid rising inflation, individuals tend to convert cash into alternative assets like property, cars, gold, and foreign currencies.
The discontinuation of higher denomination currency notes, such as Rs5,000, needs careful consideration, he argued, drawing on the experiences of India and other nations that underwent demonetization. He said, “It is to be seen how the central bank moves forward, whether it’s discontinuing the higher denomination currency notes or simply introducing new ones”. The financial expert stressed the need for the SBP to manage the printing of currency notes, a crucial factor contributing to inflation. The forthcoming steps of the central bank, whether discontinuing higher denomination notes or introducing new ones, will play a pivotal role in shaping the economic landscape.
