The Reserve Bank of Malawi (RBM) has sounded the alarm over the country’s growing destruction of banknotes, revealing that more than K400 billion worth of currency has been withdrawn from circulation annually since 2023 due to poor handling by the public.
The startling revelation was made by RBM officials during a media training workshop in Salima, where the central bank warned that the increasing damage to banknotes is driving up the cost of printing replacement currency and placing unnecessary pressure on public finances.
According to RBM, lower denomination notes are the worst affected, with virtually all K200 notes and below being destroyed after processing because they are no longer fit for circulation. More than 90 percent of K500 notes and over 70 percent of K1,000 notes are also rejected, while around 30 percent of K2,000 and K5,000 notes are removed from circulation due to excessive wear and damage.Former Finance Minister Mwanamveka Fault Reserve Bank Of Malawi On Foreign Exchange Auctions
The central bank attributed the worrying trend to a combination of factors, including high inflation, false rumours about demonetisation that encourage people to mishandle or hoard cash, the calibration of many Automated Teller Machines (ATMs) to dispense mostly high-value notes, the similar colours used on some denominations, retailers’ heavy reliance on lower-value notes for change, and the inconvenience of carrying coins.
The bank has therefore urged Malawians to treat currency with greater care by avoiding practices such as folding, stapling, writing on, tearing, or exposing banknotes to dirt and moisture.
The Reserve Bank also reminded the public that the Reserve Bank of Malawi Act, 2018 provides penalties for the wilful defacement or destruction of Malawi’s currency, warning that protecting the nation’s banknotes is a shared responsibility.
