East African Countries Pause Accepting old Kenya Bank Notes

CBK on Kshs 1000 deadline
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There is no escape from Sobibor. Central Bank of Kenya is fully committed to restoring sanity in monetary circulation to the Kenyan economy, with its directive to get rid of the old Ksh 1000 notes.

Tanzanian bank regulator in a letter addressed to all financial institutions on Friday, said the Central Bank of Kenya had informed it of assurance of new series of banknotes starting May 31 and advised it to suspend conversion of Kenyan money to Tanzanian currency.

As promised in a press briefing early this month, CBK Governor Patrick Njoroge said he will be reaching other regulators in the region to ensure a smooth transition from old to new bank notes.

“We are going to work closely with every stakeholder in the financial sector including our sister Central Banks in the region to ensure a smooth transaction and fight against illicit financial flows,’’ he said.

To help fight illicit financial flows and counterfeits into Kenya, the Bank of Tanzania has been advised to freeze CBK Currency Collection Account with immediate effect meaning anyone with the old Ksh 1000 notes in the two countries will have to carry them to Kenya to replace them for new ones under CBK’s guidelines.

“The Bank of Tanzania has been informed by the Central Bank of Kenya (CBK) of the issuance of the new series of banknotes effective Friday, May 31, 2019, with a view to combat illicit financial flows and counterfeits into the Republic of Kenya. Consequently, CBK has suspended currency conversion and repatriation of all Kenyan currency to restrict illicit flows into the Republic of Kenya, and will not accept Kenyan currency with immediate effect. Given the gravity of illicit flows concerns raised by CBK, you are required to subject all flows from and into the Republic of Kenya to enhanced due diligence,” read the statement addressed to all Tanzanian Banks.

Kenyan traders seeking to exchange money to trade in Tanzania and Uganda will have a hard time at the old Ksh 1000 are said to be used to commit other economic crimes both locally and beyond borders.

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