East African countries Uganda and Tanzania have banned the exchange of the Kenya Shilling.
Kenya recently issued a new series of banknotes effective May 31, 2019 with a view of combating illicit flows and counterfeits in the country. The Central Bank of Kenya also suspended currency conversion and repatriation of Kenya currency.
“In light of the new developments, the Bank of Uganda[BoU] will not accept Kenya shillings at its counters with immediate effect,” Charles Malinga Akol, BoU Ag Executive Director Operations said in a statement dated June 10, 2019.
“Going forward, you 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.”
On the other hand, the Bank of Tanzania on June 7, revealed that it was advised to freeze Central Bank of Kenya currency collection account with immediate effect.
“Given the gravity of illicit flows concerns raised by Central Bank of Kenya , you are required to subject all flows from and into the Republic of Kenya to enhanced due diligence,” Bank of Tanzania said in a statement to banks and financial institutions.
At the beginning of this month, Kenya’s Central bank governor Patrick Njoroge said people who want to exchange amounts between 1 million and 5 million shillings will have to go to their banks to do that.
Those who don’t have a bank account will need to contact the central bank and will be directed to a local bank after providing sufficient identification and confirmation that the cash belongs to them. Those with more 5 million shillings in cash will also have to contact bank officials.