On June 1, Central Bank of Kenya Governor Patrick Njoroge announced that the old Sh1,000 notes will be faced out by October 1.
Despite Njoroge stating that the main target is corruption that is crippling Kenyan financial system, this directive is set to affect your life even after the due date. Here are three ways in which you will be affected.
1. Increased inflation
Inflation is going to increase as affected individuals desperately look for places to dump their cash. Last year’s inflation rate fell to 4.7 per cent thanks to strong macroeconomic factors but 2019 is set to be a tough year economically. Individuals will be forced to spend excessively as October nears and be prepared to feel the negative effect of this rush.
2. Black market
The black market will be another beneficiary of this policy measure. Those targeted will invest their cash in corrupt and generally illegal activities to pump the monies back to the system and hide some. If you are a businessperson, you are likely to be used knowingly or unknowingly by those in possession of the old Sh1,000 notes. Be alert.
3.Confusion and desperation
Affected individuals will try all possible means to clean the dirty cash but a section of them will not be successful. This will lead to desperation and confusion, especially in late September. In case you are their close associate, be ready to feel the confusion and desperation.