Following a decision that came in as an order to withdraw the circulation of the KShs 1000note by October 1, Uganda has joined Tanzania to indefinitely suspend the conversion of Kenyan shillings as a way to stop illegal got cash from neighbouring countries.
In a statement released 10th June, Bank of Uganda said it has been tipped by the Central Bank of Kenya that they have issued a new series of Banknotes effective May 31, 2019 with an intention to stop illegal flow and counterfeit into Kenya.
Bank of Uganda said in the statement that it will not accept Kenya Shillings with immediate effect. This follows Central Bank of Kenya stopping the conversion and repatriation of the country’s currency. Kenyans have up to October 1 to have turned in this note after that, the older version will be invalid.
According to the Governor of Central Bank of Kenya Patrick Njoroge, Kenya is fighting corruption as officials are keeping huge swaths of money in their homes.
He also said that those exchanging money below KShs1 million can do it anywhere in Kenya with no need to have a bank account but must have official identification.
Meanwhile, Kenyans have continued to debate the possible impact of a sudden withdrawal of the notes on trade and pricing of goods.
A section of Kenyans claims that this move to curb corruption and illicit funds in this manner does not solve a thing while corruption suspects are continuously being appointed in position of leadership.
Apart from questioning the sudden withdrawal of the Kshs 1000 note, a suit of people is against the proposal to use Jomo Kenyatta’s face as a portrait on the new notes a thing contrary to the Kenyan constitution.
The Kenya Bankers Association said its members are well prepared to handle the transition to the new currency but cautioned banks to be vigilant as they face attempts of laundering and illicit fund transitioning.
In 2016, India used the same demonetization process to fight illicit finance with a level success, however Zimbabwe and Myanmar tried doing the same with futile success.
