This archive report was first published on 13 May 2020.
On May 13, 2020, the Central Bank of Kenya (CBK) released data showing a significant decline in the cash in circulation.
The cash in circulation fell by Sh23.9 billion or nearly 10 percent in February compared to the same month last year, accelerating a trend also seen in the first month of the year.
According to the CBK data, the cash in circulation stood at Sh241.96 billion in February, down from Sh265.87 billion last year.
George Bodo, an investment analyst, noted that the amount of cash in circulation is often an indicator of economic activity and the expected demand for cash as projected by the apex bank.
Mr. Bodo stated, "The money in circulation indicates economic activity, so when it is expected to be higher the CBK releases money cash into the economy."
He further added, "It seems to have projected lower economic activity from the beginning of the year. Data for March and April should be even clearer [following the pandemic],"
Notably, in August and September last year, there was a significant decline in the cash in circulation as the deadline for the removal of Sh1000 notes from circulation approached.
At the time, analysts cited slow release of payments to suppliers by the national and county governments as contributing to low cash in circulation.
