KARACHI: The State Bank of Pakistan (SBP) stated on Monday that it will shortly begin issuing new banknotes with features that comply with international security standards, emphasizing that the transition would not cause any disruptions.
“A feature for international security will be printed on the new notes. The governor of the central bank announced that the notes will feature fresh designs, high-security features, and serial numbers.
He stated that the framework for their design had already begun and that “I hope that their design framework will be finalized by March” in order to provide an estimated time of availability for the new notes.
SBP Governor Ahmad stated, “However, we will not change the notes like India,” a decision that had shocked one of the most populous countries in the world when it demonitized in 2016.
Although there was significant social upheaval and a one-time knock to India’s quarterly GDP when it demonetised a few years ago, the country’s GDP has since grown at high single-digit rates as most payments have moved to digital platforms. Mild inflation and mid-single-digit interest rates, which promote economic growth, are the results of this.
Geo News was informed by people with knowledge of the situation that the central bank is thinking about taking action in response to concerns about counterfeit money notes being used.
The CEO of the financial advice business Alpha Beta Core, Khurram Schehzad, described the introduction of currency notes with additional security features as a “positive development” but stated that it would be premature to evaluate the SBP’s choice at this time.
In response to the myth that the introduction of new banknotes will solve the problem of black money, Schehzad emphasized that this was not possible as long as steps were done to “cancel out” or at the very least decrease the quantity of higher denomination currency notes that are in use.
The financial expert emphasized the need of evaluating the cash that people have hoarded and noted that, in the face of rising inflation, people prefer to shift their cash into assets like real estate, vehicles, gold, and foreign currencies.
He stated that it is necessary to evaluate the rationale behind the discontinuation of higher value currency notes, including the Rs 5,000 note. The expert continued, “Such measures have not met with much success in India and other countries that have gone through demonetisation.”
“It is to be seen how the central bank moves forward, whether it’s discontinuing the higher denomination currency notes, or is simply introducing new ones,” he stated.
Schehzad emphasized the necessity for the SBP to control currency note printing in answer to a question about the repercussions on the economy, as this is a major contributing element to the rising rate of inflation.
