The cash outsidebanks is 230 Blns Ke254SHS and this is what Gatheca wants to bring back to the formal economy or banking sector itoke mattresses

After the president’s announcement on the Ksh 1000 note yesterday, we saw some arguing that the move won’t be successful because most of the cash being hoarded is in form of dollars, and those keeping in in form of Ksh will convert it to dollars within the 120 days given.

Well, today I decided to talk to someone who could provide expert analysis on the matter, and this was my take home:

The cash outside banks is 230 Billion and this is what the president wants to bring back to the formal economy or in the banking sector. As of June 2018, there were 210 million one thousand shilling notes in circulation valued at KShs 210 billion. This means majority of the notes both in and outside banks is of Ksh. 1,000 denomination and only 20 Billion is in other denominations and currency.

Foreign Exchange Reserves in Kenya increased to 11737.70 Million USD Million in February from 11387.20 Million USD in January of 2019. Thus to convert the Ksh 230,000,000,000 outside banks to dollars would require $2,300,000,000 or almost 20% of the total forex reserves. This CBK can’t allow because the dollar would appreciate to around Ksh 125 per dollar and given the dollars required to repay debt and exports, the economy would simply collapse given that Kenya is a net importer. Therefore government would not avail the dollars.

The dollars in the economy are very controlled so as to keep a stable exchange rate of between 95-105. And as stated above, because of the foreign debt repayment, the CBK cannot allow appreciation of the dollar, as every Ksh. 1 rise in exchange rate increases our debt by a huge margin.

So what is likely to happen is that we will see completion of more houses and purchase of assets at exaggerated prices i.e.cars, lands etc in the next four months. We can also expect inflation up to mid next year as effects of demonetization typically take 6-12 months.

All in all, this was a very necessary move. The money being hoarded needs to be injected back to the formal economy.

Hii kitu tunechambua hapa
https://t.me/joinchat/Cl07ghI9aMbyKWpS2E09mQ

If you needed dollars you can open up a dollar account in respective bank account, deposit in ksh and let the bank get to work. Later you will access your dollars nice and easy.

Haya basi rete uhodo

Let me wait for those preaching about forex bureau huko Eastleigh, as if these bureau’s operate in s vacuum.

Wacha kucopy paste vitu za watu, be original, lubish

Wapi… lubitch

F

You still need to declare the source of your KES

That’s to be expected. Just wanted villagers to know access to USD is not monopolized by CBK.

A brilliant move

Assuming 30million adults in Kenya, 230 billion boils down to an average of 8k in cash in each person’s wallet.
While I don’t know if that 8k per person average is high or low, it doesn’t look like a lot to cause suspicion.
Tho to tell you the truth, I hardly walk with more than 2.5k in cash. All my bills and high value purchases are paid in mpesa. Hell, I don’t even remember the last time a side hustle paid in cash

Wacha kujifanya hujui penye umetoa