Pakistan is set to roll out new designs for currency notes across all denominations next year, aiming to enhance security features, according to Jameel Ahmad, Governor of the State Bank of Pakistan.
The central bank is expected to finalize the designs by December, with the new notes being issued in stages, Ahmad informed a parliamentary committee in Islamabad on Wednesday. Among the redesigned currency, one denomination will be issued as a polymer note, he added.
“This polymer note will be introduced to evaluate its durability and security effectiveness compared to paper notes under Pakistan’s climatic conditions,” Ahmad explained.
The existing currency notes will be gradually phased out over a period of five years following the introduction of the new designs. Ahmad clarified that there are no current plans to demonetize any existing currency notes.
The State Bank of Pakistan had previously indicated that central banks generally refresh banknote designs every 15 to 20 years. This practice ensures the notes remain secure and incorporate the latest advancements in design and security technology, as stated in a press release on January 30.
Analysis and Market Impact
For investors and financial institutions, the introduction of new currency designs in Pakistan presents a noteworthy opportunity to assess the impact on the country’s financial system. The move to enhance security features aligns with global practices and is likely aimed at combating counterfeiting and maintaining public confidence in the currency.
The introduction of a polymer note, in particular, is a significant step forward. Polymer notes are known for their durability and advanced security features, which could reduce the costs associated with frequent replacements of worn-out paper notes. If the polymer note proves effective, it could signal a broader shift in Pakistan’s currency issuance strategy, potentially leading to long-term savings and improved security.
For businesses and consumers, the gradual transition to new currency designs will require adaptation. Financial institutions, retailers, and service providers will need to update their cash handling processes to accommodate the new notes. Investors should also monitor the rollout closely, as it could influence cash circulation dynamics and potentially affect the broader economy.
