By: David Kinyanjui @MountKenyaTimes
The Central Bank of Kenya (CBK) has defended the quality of new currency notes, which have now been in circulation for about two years.
According to CBK governor Patrick Njoroge, mishandling of currency notes by Kenyans is to blame for quick wear and tear.
Dr Njoroge’s defense comes amidst concerns on the life-span of the new notes, particularly the low denominational Ksh.100 and Ksh.50 notes.
“Users, especially matatu crew, have a habit of folding the bills excessively, keeping them in sweaty parts of the body and in shoes. Those were among the main reasons for the new notes wearing out quickly,” he said.
The CBK governor who spoke during an appearance before the National Assembly Finance and National Planning Committee on Tuesday acknowledged that the denominational notes especially the Ksh.50 note has shown its vulnerability however said the new notes are comparatively better than their predecessor.
Dr Njoroge based his appraisal of the new version notes on advanced security features, varnish to reduce tear and wear and features to support identification by visually impaired persons.
He however admitted that Kenya did not procure the best of quality in the design of new generation currency notes, adding that CBK went for quality that was close to other African countries.
“We looked at three things… the feel, aesthetic and security features. We [chose] a comparable quality with other countries like ourselves,” Dr Njoroge said.
Dr Njoroge said the CBK holds its clean banknote policy in high regard and uses it to facilitate the smooth flow and withdrawal of banknotes from the public.
The reserve bank uses a fitness indicator measuring the recovery rate- the proportion of clean banknotes delivered by commercial banks.
According to the bank, the recovery rate has been relatively greater since the roll-out of new currency notes, with the average rate settling at between 10 and 15 per cent.
Dr. Njorroge also said The CBK is considering new measures to sustain its clean banknote policy, including encouraging Kenyans to directly seek out replacements for ‘run-down’ notes.
“If you have a dirty note, you can actually present this to your bank and exchange it for new notes or deposit the dirty notes. You can also directly exchange your dirty notes at the CBK,” said Dr. Njoroge.
The CBK estimates the life-span of new notes at a mean one year, in contrast to 6-9 months for the older banknotes.
The new banknotes were introduced in June 2019 with the older Ksh.1000 note being replaced entirely through demonetization.
The Kirinyaga senator led committee queried why Kenyans never complained of fast wear and tear when they handled the old generation currency, yet they handled them the same way.
They urged CBK to commission a survey to establish the source of many concerns from Kenyans, even as it considers encouraging less cash transactions in the economy.