This archive report was first published on 2 October 2019.
On 1st June 2019, the Central Bank of Kenya launched a new currency, aiming to phase out the old 1,000-shilling note. The bank had estimated that there were Ksh217 billion of the old notes in circulation. However, by the deadline of 31st September 2019, only Ksh209.6 billion had been returned.
Despite the shortfall, the demonetization process was deemed successful by CBK Governor Dr Patrick Njoroge. He stated, “We did well and we are happy with the outcome,” at a media briefing.
However, questions remain about the whereabouts of the remaining Ksh7 billion. The governor explained that 7,386,000 pieces of the old Ksh 1,000 notes did not return, making them worthless.
The CBK has also announced plans to phase out other denominations, including the Ksh50, Ksh100, Ksh200, Ksh500, and Ksh1000 notes.
According to Dr Njoroge, the returned money will be shredded and turned into briquettes, with each briquette equivalent to Ksh 1,000,000 in shredded banknotes.
As of September 30, 149.6 million pieces of the new generation Ksh1,000 notes had been released into the banking system.
Dr Njoroge also highlighted the benefits of the currency change, stating, “Demonetisation has been successful because we have completed it smoothly, with AML/CFT filters firmly in place, and kept out money whose owners did not want to be subjected to the relevant checks in the system.”
