This archive report was first published on 30 November 2019.
Kenya's cash circulation hit a six-year low in September, with the amount of money in circulation dropping to Sh157.7 billion, the lowest since April 2014.
The biggest drop in cash circulating outside banks came in the four months to September, when money outside the institutions fell by Sh65 billion.
Analysts are puzzled by the drop, given that the Central Bank of Kenya had announced in October that notes worth Sh7.4 billion were not exchanged, rendering the cash invalid.
George Bodo, a director at Callstreet Investor Relations, questioned the Central Bank's announcement on money supply after the withdrawal of the old Sh1,000 notes.
Prof XN Iraki, an economist at the University of Nairobi, suggested that the demonetisation process could have reduced money outside the banks, but also pointed to the government's failure to pay suppliers as a possible factor.
Business owners have accused the national and county governments of delaying payments to suppliers worth more than Sh150 billion, which has hurt businesses and led to job losses.
Companies are struggling with reduced sales and profits in a soft economy that has persisted since 2017, and have put on hold hiring of new staff.
