The Bank of Uganda saved 45.52 billion shillings ($13 million) in printing costs in the last financial year thanks to process improvements and new issuance guidelines.
In its statement, the central bank said a “general decline in aggregate demand for money” was also a factor in lowering the cost of the central bank’s money latest annual report.
According to the report, the cost of printing money fell by 23.6% in 2020-21 from Sh193 billion to Sh147.5 billion.
The central bank noted that commercial banks have withdrawn banknotes and coins by 5.83% in 2020-21 due to the slowdown in economic activity caused by Covid-19.
The central bank said it could also reduce printing costs by reissuing a larger proportion of banknotes. As local lockdowns ease, more staff are able to process returned banknotes.
The central bank was unable to process any returned banknotes between May and June 2020 and had to issue new notes to meet demand, driving up costs.
Earlier this year, the central bank also adopted guidelines requiring it to reissue 80% of returned banknotes in circulation. Only 20% of the banknotes in circulation are new.
Prior to this, the split of releases was 70% reissues and 30% new releases. The Bank of Uganda managed to reissue 75% of the notes it received in June 2021, which the report said was “reasonable.”