END OF AN ERA

Goodbye Sh1000 notes

The shilling has depreciated to 103.89 yesterday against the dollar from 101.23 in June 1.

In Summary

•Even so, the CBK has maintained that the shilling is stable and was monitoring to ensure that the process is not disruptive to the economy.

A bundle of Sh1,000 notes
A bundle of Sh1,000 notes
Image: FILE

The Kenyan shilling has lost Sh2.66 units against the dollar over the four months since June 1, as the country retires the old Sh1000 notes.

According to Central Bank data, the shilling remained stable against the dollar on the last day of demonitisation, despite predictions to hit to as high as Sh105.00.

Commercial banks quoted the shilling at an average of 103.89 against the dollar yesterday compared to a closing average of 103.82 on Friday. Reuters reported that the shilling was stable on Monday, supported by hard currency inflows from remittances by Kenyans working abroad.

 

The Google trader quoted the shilling at 103.86.

In June, the CBK's governor Patrick Njoroge announced to withdraw the old Sh1000 notes in a move to fight money laundering, counterfeiting and corruption by forcing those with stashes of cash from illegal profits into a corner.

At the time, the shilling traded at 101.23 against the greenback.

However, the currency has lost value over time closing at an average of 104.21 on July 31.

It traded low at 99.599 on March 11.

Even so, the CBK has maintained that the shilling is stable and was monitoring to ensure that the process is not disruptive to the economy.

The CBK has also been on the forefront to mop out the excess cash in the market through the Treasury bills, supporting the shilling from volatility during the time.

 

In the week ending September 26, it accepted bids worth Sh3.29 billion for the 91-day bills auction out of Sh4 billion auctioned despite the declining yields at 6.31 per cent.

The weekly bulletin also showed that CBK received bids worth Sh436.4 million and Sh11.58 billion for the 182- and 364 -day T-bills respectively out of Sh10 billion advertised amount for each.

The interest rates were 7.17 per cent and 9.77 per cent respectively.

"The Kenya shilling remained stable against major international and regional currencies during the week ending September 26. It exchanged at Sh103.86 per US dollar on September 26, compared to Sh103.91 on September 19," CBK stated.

BBC yesterday reported that more than $600m (Sh60 billion) worth of the old Sh1,000 notes was yet to be turned in just hours before the deadline for demonetisation.

Njoroge said over 70 per cent had been returned.

As at September 1, the regulator had received 116 million pieces of the old version of Sh1,000 old notes out of Sh217 billion in circulation.

In a Monetary Policy Committee press briefing, the governor announced that about 53 per cent of total money converted was done in July and only 24 transactions were above Sh2 million with an average of Sh3.1 million per transaction.

The governor is expected to give a update on the exchange whose deadline was yesterday midnight.