The modified N$10 banknote a legal tender
As at 31 December 2021, the total currency in circulation stood at N$4.63 billion. Johannes !Gawaxab, Governor: Bank of Namibia
PHILLEPUS UUSIKU
Johannes !Gawaxab, the governor of the Bank of Namibia (BoN), became the third Namibian central bank chief to have his signature on a Namibian banknote.
The first Namibian central bank governor was Tom Alweendo, who is now the minister of mines and energy, followed by Iipumbu Shiimi who is serving as the minister of finance.
The modified N$10 banknote, launched on Friday, will run concurrently with all existing banknotes accepted as legal tender in the payment of goods and services.
Speaking at the launch, !Gawaxab notes that money is the lubricant that enables a society to organise itself to achieve economic progress. Evidence suggests that merchants and consumers, particularly those with low income, would be significantly worse off without cash.
This may also be the case for other segments of the population, such as older people or those with a low appetite for financial intricacies, who prefer cash over other means of payments, the governor said.
“It goes without saying that the value of paper money depends on trust. Ensuring public trust and confidence in our money is at the heart of what central banks do. Money can only play its fundamental role if that trust, and confidence is maintained. That motivates the bank's core objective of price stability so that people can be confident of the value of their money over time and financial stability to be able to access and use it when and where they want to,” he pointed out.
The Namibian economy is one that is highly cash dominated as is evidenced by the over 50 million automated teller machine (ATM) withdrawals totalling N$36.9 billion conducted in 2021.
Furthermore, during the same period, e-money cash redemption amounted to 6% of the total currency in circulation. Worth noting is that as at 31 December 2021, the total currency in circulation stood at N$4.63 billion. These figures illustrate my point that Namibians remain heavily cash reliant despite the advancements in digital payments. It is also indicative of the symbiotic relationship between cash and cashless transactions, meaning the two have become intertwined and thus cash will not be displaced in the near future, !Gawaxab said.
MONEY SUPPLY
The amount of money in a nation's money supply is crucial to the health of its economy. If there is not enough currency in circulation, the economy cannot operate seamlessly. It is the same as making an engine run without oil or expecting brakes to work without brake fluid, this will be a disaster. The N$ 10 banknote denomination is one of the banknotes with the highest circulation velocity. Circulation velocity is the number of times in a given period the average banknote will return from circulation to the central bank, he emphasised.
In 2021, the N$200 banknote was the most circulated with a volume of 14.3 million pieces, while the N$10 banknote is the second mostly circulated note at a volume of 10.2 million pieces. The reasons for this are pretty basic. Every Namibian from all walks of life is able to possess a N$10 banknote, and it is used daily in domestic transactions, hence it is classified as a transactional note. It is a note that serves both our formal and informal economies, and its importance cannot be overemphasised, !Gawaxab said.
“The Namibia dollar is the oil that fuels the Namibian economy, and it is an important symbol of our statehood, identity, and culture as a people. Our responsibility is to ensure that Namibians have total trust and confidence in the Namibia dollar. Therefore, we undertake to continue discharging this responsibility as a custodian of our currency, now and in the future. And that means exercising our monetary policy mandate properly so that our money's value is not lost and ensuring that the national payment system is resilient while fostering a world-class financial system,” the governor [email protected]
Johannes !Gawaxab, the governor of the Bank of Namibia (BoN), became the third Namibian central bank chief to have his signature on a Namibian banknote.
The first Namibian central bank governor was Tom Alweendo, who is now the minister of mines and energy, followed by Iipumbu Shiimi who is serving as the minister of finance.
The modified N$10 banknote, launched on Friday, will run concurrently with all existing banknotes accepted as legal tender in the payment of goods and services.
Speaking at the launch, !Gawaxab notes that money is the lubricant that enables a society to organise itself to achieve economic progress. Evidence suggests that merchants and consumers, particularly those with low income, would be significantly worse off without cash.
This may also be the case for other segments of the population, such as older people or those with a low appetite for financial intricacies, who prefer cash over other means of payments, the governor said.
“It goes without saying that the value of paper money depends on trust. Ensuring public trust and confidence in our money is at the heart of what central banks do. Money can only play its fundamental role if that trust, and confidence is maintained. That motivates the bank's core objective of price stability so that people can be confident of the value of their money over time and financial stability to be able to access and use it when and where they want to,” he pointed out.
The Namibian economy is one that is highly cash dominated as is evidenced by the over 50 million automated teller machine (ATM) withdrawals totalling N$36.9 billion conducted in 2021.
Furthermore, during the same period, e-money cash redemption amounted to 6% of the total currency in circulation. Worth noting is that as at 31 December 2021, the total currency in circulation stood at N$4.63 billion. These figures illustrate my point that Namibians remain heavily cash reliant despite the advancements in digital payments. It is also indicative of the symbiotic relationship between cash and cashless transactions, meaning the two have become intertwined and thus cash will not be displaced in the near future, !Gawaxab said.
MONEY SUPPLY
The amount of money in a nation's money supply is crucial to the health of its economy. If there is not enough currency in circulation, the economy cannot operate seamlessly. It is the same as making an engine run without oil or expecting brakes to work without brake fluid, this will be a disaster. The N$ 10 banknote denomination is one of the banknotes with the highest circulation velocity. Circulation velocity is the number of times in a given period the average banknote will return from circulation to the central bank, he emphasised.
In 2021, the N$200 banknote was the most circulated with a volume of 14.3 million pieces, while the N$10 banknote is the second mostly circulated note at a volume of 10.2 million pieces. The reasons for this are pretty basic. Every Namibian from all walks of life is able to possess a N$10 banknote, and it is used daily in domestic transactions, hence it is classified as a transactional note. It is a note that serves both our formal and informal economies, and its importance cannot be overemphasised, !Gawaxab said.
“The Namibia dollar is the oil that fuels the Namibian economy, and it is an important symbol of our statehood, identity, and culture as a people. Our responsibility is to ensure that Namibians have total trust and confidence in the Namibia dollar. Therefore, we undertake to continue discharging this responsibility as a custodian of our currency, now and in the future. And that means exercising our monetary policy mandate properly so that our money's value is not lost and ensuring that the national payment system is resilient while fostering a world-class financial system,” the governor [email protected]
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