Tanzania and Uganda suspends conversion of Kenyan shillings

Tuesday June 11 2019

 

By The Citizen Reporter @TheCitizenTZ news@tz.nationmedia.com

Dar es Salaam. Uganda has joined Tanzania to suspend the conversion of Kenyan Shillings in a move linked to the anti-corruption war in the neighbouring country.

The Bank of Tanzania (BOT) and Bank of Uganda (BOU) have separately announced the suspension of Kenya’s current account, meaning no Kenyan currency should be moved across the countries.

The central banks of the two countries have issued the alert to banks in their respective jurisdictions following a request from the Central Bank of Kenya (CBK). The order means those wishing to convert Kenyan currency will have to do it in Kenya.

Kenya has rolled out a series of new currency notes and set October 1 as the deadline for use of the current legal tender. According to the CBK Governor John Njoroge, the move was aimed at mopping from the market billions of Kenyan shillings in illicit flows or funds laundered through proceeds of corruption.

Mr Njoroge particularly was targeting the KSh1000 note, which he said had also been largely abused to print counterfeit currency. CBK announced the switch effective June 1, 2019 and has begun issuing the new notes in its market. 

The BOT statement advised

 “Bank of Uganda will not accept Kenya Shillings at its counters with immediate effect,” BOU said in a statement. “CBK has also suspended currency conversion and repatriation of Kenya currency.”

BOU added that going forward, “[people] are advised to subject all flows from and into Kenya to enhanced due diligence. Please be advised that changing Kenyan currency from old to new banknotes can only be done in Kenya.”

Mr Robert Mpuuga, a banker in Uganda, said they were not accepting the 1,000 Kenyan Shillings note but were converting smaller denominations.

In Tanzania, Tanzania Bankers Association (TBA) Chairman Abdulmajid Nsekela confirmed they would not be converting the Kenya shillings and advised individuals to take personal responsibility in handling their money.