A grouping of economic analysts has expressed strong doubts towards CBK demonetization goal. They say that most of the money targeted by CBK’s move to devalue the old Ksh1000 notes have found their way into the formal financial system.
A couple of months ago, CBK rolled out new currency notes that were well received by Kenyans. Unlike the other currency notes, the public was granted four months window to exchange their Ksh1000 notes with the new ones, failure to which the notes will be paperless. CBK had highlighted that this will be a way to ensure smooth supply and circulation of money into the economy and catch up with money launders and fraudster.
“The general issue on demonetization is there is not really any data points to go about to analyze how much money is in the mattress. There is really a big preception among Kenyans about the amounts. We have to very careful about managing expectation on the issues around demonetization.
“We have seen some money come back into the economy, but we must have overstated how much money was in peoples mattresses if Ksh 25 billion as of June, even if we were to extrapolate, we might see a Ksh 75 Billion coming into the economy, which is not a small change but I think there was an expectation that money was larger,” said representatives from the Kenya Finance Guide.
The deadline for exchanging the old Kshs 1000 currency notes with the new ones is fast approaching. The four-month period given for all persons to exchange the old generation one-thousand shillings notes was meant to ensure all citizens have the relevant information and enough time for the changeover.
CBK Governor has reminded the public about the approaching deadline for the exchange of the old Ksh 1000 notes with the new ones, with particular emphasis to employers, Chama members, parents and folks in the village to do their transaction using the new currencies. Governor Njoroge had earlier mentioned that the deadline for the exchange will not be extended.