By Judith Gicobi
In the run-up to the August General Election, the average monthly value of Sh1,000 notes in circulation has soared by Sh21.2 billion, amidst the high cost of living.
As a result, the average monthly value of Sh1,000 in circulation has risen to Sh235.2 billion, up from Sh214 billion the previous year, defying the prevalent impression of economic hardship.
It also compares to the 2019 monthly average of 196.192 million pieces.
The Sh21.2 billion increase in average monthly circulation of Sh1,000 notes is the greatest year-on-year increase ever recorded, surpassing the previous high rating of Sh20.5 billion set in 2007 election year.
Although the CBK does not give a rationale for fluctuations in currency circulations, trends in its statistics dating back to 1998 show that rises in average monthly ﬂows have occurred during election years.
According to a bank executive from one of the country’s top tier banks, the recent surge in popularity of Sh1,000 notes could indicate that the value of low denomination notes is eroding as the cost of life rises.
In 2019, the CBK demonetized old Sh1,000 notes and replaced them with new ones, rendering Sh7.4 billion worthless.