Central Bank of Kenya Governor Dr Patrick Njoroge has revealed the amount of money in old Ksh 1000 the state was able to collect in the just concluded demonetisation exercise.
Speaking during a press conference at the CBK headquarters in Nairobi on Wednesday, Njoroge said that the State has collected 209.66 million old-generation Ksh1, 000 notes out of the 217 million pieces that were in circulation by September 30
Njoroge said that throughout the exercise that began on Madaraka Day, June 1, the State flagged 3, 172 suspicions transactions.
He noted that Kenya had two reasons which triggered the demonisation exercise.
“Demonetisation is done for a number of reasons. In Kenya, we did it for two reasons: the first one, was to deal with illicit financial flows in Kenya and other countries. The second reason was that we needed to deal with counterfeiting of the Kenyan currency; the bank note of choice was Ksh1, 000,” said Njoroge.
“We did not do that to destabilise your financial position,” he added.
The CBK chief said the regulator chose a 4-month window to wipe out the old-generation Ksh1, 000 notes so as to give Kenyans ample time to exchange the old money with new tender.
“There are two general approaches to demonitisation. The first one is what is called the shock approach, where you demonitise overnight. This happens where there is significant dislocations in the economy. The other approach is the gradual approach, which minimises disruptions to the economy and also enhance the effectiveness in addressing the objectives; in our case, it is corruption, money-laundering and tax evasion,” said Njoroge.
“There are some questions that Kenyans asked throughout the exercise: Some said: ‘was 4 months enough’? Others said: ‘Was 4 months too much? Maybe we should have done 2 months’. We had to strike a balance between being overly generous for the common mwananchi to allow them a lot of time to exchange the old money,” said Njoroge.
