This archive report was first published on 20 July 2019.
Kenya's Central Bank of Kenya has slowed down the issuance of new-generation banknotes, causing a shortage of the new currency, which is part of the country's bid to fight money laundering and other forms of illicit financial flows.
According to sources, the Central Bank of Kenya has reduced payments to government ministries, departments, and agencies in the new generation currency, with staff being told not to make any further payments to the government using the new generation currency.
Commercial banks have reported a shortage of the new notes after configuring automated teller machines to dispense the new currency, with the Kenya Bankers Association blaming the shortage on the high demand for new banknotes than earlier anticipated.
However, the association's chief executive, Habil Olaka, has described the situation as 'temporary' and said that it will be resolved within a short time.
On June 1, the Central Bank of Kenya announced that it was withdrawing Ksh1,000 notes from circulation effective October 1 to deal with counterfeits and money laundering, but the regulator is now battling a legal suit which seeks to have the decision declared illegal.
Published on July 20, 2019, at 5:00 PM EAT.
