Expect inflation to reduce from now hence fourth as the thieves stashing money in old graves dig them up. The is going to be circulation of money and purchase of fixed assets. Land, vehicles, houses etc.
Hapo Ouru ameshika wezi waru kabisa
Isn’t introduction of money into the system what causes inflation? Ama what’s your definition?
People will acquire assets as opposed to going to the banks to deposit hard cash
About 80% of M0/Narrow money(physical banknotes) is in form of 1000shs notes. Their withdrawal will bring that money back to circulation. It is not just wealthy who stash these notes, even ordinary citizens hoard money in tough economic times. In India it was tried and worked out well.
Define inflation please. If everyone flocks to buy land or property in cash, which shall be banked, won’t the price of goods go up? Demand v supply? Or what’s inflation?
GDP in India reduced. The demonetization mopped up 99% of the cash, they only wanted 80% as the 20% was illicit money. Their intention failed.
It backfired.
Black money was not caught.
There was a hard cash shortage for months
It retarded growth
The shilling could also depreciate as criminals seek refuge in the dollar.
ordinary kenyans will simply deposit their savings, it will only affect big fish in corruption. Do not expect high demand for ordinary supermarket products, it will affect 5 star hotels, casinos, bamburi cement etc
With the news already out that 1000 note is being phased out, I don’t think any reasonable thinking person with forex will trade it for 1000 shs note.
so the illicit cash was simply swapped with the new and taken back under the mattress
Is this cash required by the world foreign exchange standards ama ni ya kenya pekee.
wont it be recognized ? Kama ile 40 bob ya kibaki . its rendered absolete by world foreign standards