Central Bank of Kenya Governor Patrick Njoroge has revealed that 3,172 suspicious transactions were flagged by CBK during the demonetization process. Moreover, Kshs 1,000 notes worth 7,386,000,000 weren’t returned before the September 30th deadline, when they ceased being legal tender.
The government had placed the deadline only for the Kshs 1,000 operating as legal tender, even as new Kshs 1,000 were in circulation. Speaking to the press, Njoroge said the demonetization was to deal with illicit financial flows to deal with counterfeits and the currency of choice was the old Kshs 1,000. “In designing the demonetization strategy, we looked at the experience of other countries and learned from them. We wanted to minimize the disruption to the economy while enhancing effectiveness.”
He said the myth that Kenyans love doing things late was debunked as the old currency notes were returned on time. The volume of total transactions in August was 161,082,470. He added that a robust anti money laundering framework was set up during the demonetization process. According to the CBK Governor, the process had no impact on inflation, there were no queues of buyers of high value assets to launder money, and there were few ques in banks.
The new currency notes of Kshs 50, Kshs 100, Kshs 200 and Kshs 500 are in circulation, and the old ones are still in the market, with no deadline set by CBK similar to the old Kshs 1000 notes.