Bank of Tanzania Suspends Conversion of Kenyan Notes

The Central Bank of Kenya (CBK) has published a discussion paper on Central Bank Digital Currency (CBDC) inviting comments from the public aimed at ensuring an informed policy review regarding financial sector innovations.

Dr Patrick Njoroge, CBK Governor Displaying some of the new currency Notes

The Bank of Tanzania (BoT) has frozen exchange of Kenyan bank notes with immediate effect.

Through a letter addressed to all financial institutions on Friday, the Tanzanian bank regulator said the Central Bank of Kenya had informed it of assurance of new series of banknotes starting May 31.

With a view to combat illicit financial flows and counterfeits into the Republic of Kenya, the Bank of Tanzania has been advised to freeze CBK Currency Collection Account with immediate effect,’’ the memo read.

“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,” added  the statement.

“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,” BoT directed.

Speaking when he unveiled the new legal tender at the Madaraka Day celebrations in Narok, CBK Governor Patrick Njoroge said the move is intended to fight counterfeit practises.

“All the older Ksh.1000 series shall be withdrawn. All persons have until October 1, 2019 to exchange these notes, after which the older ones will cease to be legal tender,”  said Dr. Patrick Njoroge, the central bank governor while unveiling the new legal tender during the 56th Madaraka Day celebrations.

Multimedia platform providing analysis of business & financial news in East Africa.

Leave a comment
scroll to top