Crisp banknotes of various denominations may line many Kenyans’ pockets, but it is the Sh1, 000 note that stands out. The Sh1, 000 banknote remains the most widely held in Kenya — defying popular belief that smaller value notes are the most sought-after in the country.
Analysis of currency circulation in the country shows that the Central Bank of Kenya (CBK) has injected an additional 120.15 million pieces of Sh1, 000 note worth Sh120.15 billion into circulation in eight years leading up to June 2018 to meet rising demand.
Data drawn from CBK banking supervision reports, shows that the Sh1, 000 note, popular for its elephant symbol, is increasingly being preferred in transactions as other denominations such as Sh500 and Sh200 note drag.
Whereas the pieces of Sh1, 000 notes in circulation were valued at Sh210.37 billion by end of June last year, those of Sh500 were only Sh16.31 billion. This is a value gap of Sh194.06 billion.
Despite bank notes quantities in circulation decreasing by 3.6 per cent from 531 million pieces in the year to June 30, 2017 to 512 million pieces, in the year to June 30, 2018, quantities of Sh1, 000 note booked a 4.59 per cent rise.
Currency comes with risk of counterfeiting. However, the CBK says it continues to create and enhance public awareness on security features of bank notes as a way of minimising this vice.
“The awareness and other anti-counterfeiting strategies are carried out in collaboration with commercial banks, security agencies, other educational institutions and currency dispensing machine vendors,” it says.
Some economies in the world such as India and Singapore have had to withdraw their most valuable notes to close down the economy of untaxed cash transactions, which they say enabled corruption, funding of terrorist groups and encouraged currency counterfeiting.
India withdrew its highest value bank notes- 500 and 1,000 rupee notes- as part of clampdown on ‘black money’. In 2014, Singapore stopped printing the mammoth S$10,000 banknote – one of the world’s largest value banknotes.
For Kenya, Sh1,000 note is the largest value bank note followed by Sh500. Incidents of corruption linked to the most valuable currency have been reported before in the country.
The CBK is the only institution in Kenya with full discretion and sole rights to issue currency notes and coins. It is also charged with planning, forecasting, procuring and distributing it, according to information on CBK website.