INTERNATIONAL – About 7.3 billion shillings (about $71.5 million) were not returned during the demonetization of the 1,000 shilling old notes, an official said Wednesday.
Patrick Njoroge, governor of the Central Bank of Kenya (CBK), told journalists in Nairobi that the four-month phase-out of 1,000 shilling notes proceeded well and achieved its overall objective of removing money obtained from illegal activity from the economy.
He said that the other small denomination bills will remain to be legal tender but will be phased out gradually in the next two years with new generation notes that have enhanced security features to make them difficult to be counterfeited.
He observed that the strategy of replacing the old notes was put in place over a period of two years and borrowed lessons from other countries that have undertaken a demonetization exercise.
The CBK official said that the demonetization exercise was put in place to eliminate money laundering activities in the country.
Njoroge said that during the exercise about 3,172 suspicious activities were flagged off and a number of bank accounts were shut down for violating anti-money laundering laws.