Kenya Disposes of Kshs 7.4 Bn worth of Old Currency as New Notes Take Hold

The Central Bank of Kenya has said that 7.4 million pieces of the old 1,000 currency were not returned to the regulator by end of the deadline.

According to Patrick Njoroge, the Governor at CBK, the demonetisation exercise was a great success, as the unreturned cash represented 3 percent of the full amount.

“In terms of the overall, it is not a significant impact in terms of numbers,” Njoroge told a press conference. “The point here is that it was not being used. It was actually seated in somebody’s mattress. It wasn’t in circulation.” He quipped that “whoever is holding this is poorer.”

He said the exercise was successful in flagging dubious transaction. During the demonetisation period, over 3,000 accounts were flagged having suspicious transactions. The clean up of old 1,000 currency notes was to rid the economy of illicit funds that the CBK governor said were prevalent in the economy.

“Now that is a big number [3,000 accounts] and the investigators need to follow this and connect the dots,” he said.

The governor also applauded the process as it moved cash that was sitting out of circulation, into the financial systems through bank credits.

He, however, said that the process did not have any impact on inflation during the June – September period.

Central Bank of Kenya said they had released around 150 million pieces of the new banknotes with the difference being 59 million pieces, which will be availed in due time. The CBK expects that other old denominations will be swapped with new currencies in two to three years.

The old currency notes will be shredded and turned into brickets, Njoroge said.

In a report done in July this year, 60 percent of Kenyans supoorted the currenly change, believing that it would fight corruption. There was no last minute mad rush in the Kenyan banks as expected.

Feature Photo Courtesy: StandardMedia