Kenya to spend Sh14.2 billion in printing new currency notes- CBK
By Abdirahman Khalif |
Thugge explained that the tender for printing the new notes had received approval from both the Cabinet and the Attorney General.
The Central Bank of Kenya (CBK) has disclosed that the cost of printing new currency notes will amount to Sh14.2 billion. The bank governor, Kamau Thugge, shared this during a session with the Finance Committee in Parliament on Wednesday. Thugge explained that the tender for printing the new notes had received approval from both the Cabinet and the Attorney General.
He informed the committee that the Sh14.2 billion is Sh3 million less than the amount spent on the previous contract with De La Rue.
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He noted that the new currency notes are of superior quality compared to those previously issued. The old notes will remain in circulation until they naturally wear out and are gradually withdrawn.
Thugge explained that currency notes deteriorate over time and are eventually removed from circulation. As these notes are withdrawn, the overall supply decreases, necessitating the production of new notes to prevent shortages.
"Notes get torn and are withdrawn from circulation. This means the supply reduces and we need to replenish to avert stockout," Thugge said.
He added that CBK closely monitors the demand for currency and adjusts the supply accordingly to maintain balance.
"The process involves estimating the demand for money and then meeting that demand with the appropriate supply. Several factors are considered before any decisions are made," Thugge explained.
The new currency series will include denominations of Sh50, Sh100, Sh200, Sh500, and Sh1,000. Each denomination will feature the signature of the new CBK Governor, Kamau Thugge, who assumed office in mid-June last year, alongside the signature of Treasury Principal Secretary Chris Kiptoo.
"This is just the normal process of the CBK. The notes we have are getting old, and therefore we need to get new notes," Dr Thugge stated during a post-monetary policy meeting early this month.
The printing of the new notes is being handled by a German firm, Giesecke+Devrient, which Thugge described as one of the best in the industry.
The decision to switch to the German firm follows CBK's suspension of orders from De La Rue Kenya for at least 12 months. This decision impacts the joint venture in which the Kenyan government holds a 40 per cent stake.
The newly printed notes, which will bear the year 2024 and feature enhanced security threads with colour-changing effects unique to each denomination, will replace the current series that was issued in 2019.
The new signatures on the currency notes symbolise a transition in leadership following the retirement of former CBK Governor Patrick Njoroge in mid-June last year.
According to CBK data as of December 2023, the total value of currency in circulation was Sh340.59 billion. Of this, Sh290.97 billion was attributed to Sh1,000 notes. The Sh500, Sh200, Sh100, and Sh50 denominations accounted for Sh16.11 billion, Sh11.58 billion, Sh6.04 billion, and Sh15.56 billion, respectively.
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