MONEY AND BANKING
“Whereas our currency in Uganda (the Ug shs) is seen to meet several of the required characteristics of good money, it has several weaknesses “discuss the observation giving examples and illustration to support your answer.
Uganda was the first African country to introduce the advanced security feature SPARK on a regular banknote series. SPARK is an optical security feature recognized by central banks worldwide and is used on a number of banknotes for protection against counterfeiting. In 2010 new note designs were released particularly the 1000, 2000, 5000, 10000,20000 and 50000shillings series that incorporate the latest security features such as watermarks which look like the State Emblem of Uganda. Protective strips with the micro text of a digital designation of a nominal value run across the notes. Also, there are various holographic strips in the note with visible digital designation of the nominal value and an abbreviation of Bank of Uganda.
The Bank of Uganda issued a new family of notes featuring a harmonized banknote design that depict Uganda’s rich historical, natural, and cultural heritage. They also bear improved security features. Five images appear on all the six denominations: Ugandan mat patterns, Ugandan basketry, the map of Uganda (complete with the equator line), the Independence Monument, and a profile of a man wearing Karimojong headdress. This makes Uganda currency meet several characteristics required of good money.
However Ugandan money has weaknesses which include the following observations.
Uganda shilling money is susceptible to accidental tearing, shredding, burning and being run through the laundry tissue owing to the a low paper material used in printing and minting.
Also as the number of legal notes increases, the value of those notes decreases because more shillings are chasing relatively fewer goods and services, which causes prices to rise. If inflation gets out of control, it can lead to hyperinflation...