Pretoria - The value of banknotes in circulation in the year ended March 2011 increased by 6.41 percent to R72.7 billion from R68.3 billion in the 2009/10 financial year, said the Reserve Bank.
This was revealed in the central bank's Annual Report released on Tuesday.
"The maximum value of banknotes in circulation of R82.5 billion was reached on 20 December 2010, compared with a maximum value of R78.7 billion on 22 December 2009. The average percentage increase in the value of banknotes in circulation is lower than the nominal Gross Domestic Product growth," said the bank.
This can be ascribed in part to the withdrawal of the pre-February 2005 R200 banknotes in circulation.
Circulation of the Rand has increased in the Common Monetary Area (CMA) and other SADC countries, especially Zimbabwe, where it is used as official legal tender along the US dollar.
The average value of coin in circulation increased from R3.8 billion in 2009 to R4.1 billion in 2010.The higher-than-expected 11 percent increase can be ascribed to an increase in demand for South African coins in Zimbabwe.
The bank said currency counterfeiting remains a risk to itself and the economy in general.
"Concerted efforts are being made with the support of the South African Police Service to combat counterfeiting and to ensure the integrity of currency in circulation," said the SARB. It added that the withdrawal from circulation of the R200 banknotes printed before February 2005 was done in order to counter an emerging counterfeit threat to this banknote series.
A complete review in collaboration with the cash industry of the cash management strategy to ensure that enough banknotes of acceptable quality remain in circulation is being undertaken.
