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Kenya's Cash Circulation Sees Steepest Decline in Five Years, Reports Say

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Kenyan shillings - Sputnik Africa, 1920, 01.04.2024
Kenya's economy grew by 5% in 2023 compared to 4.8% in 2022, according to the National Treasury. The International Monetary Fund predicts that the economy of the East African nation will grow by 5.5% in 2024.
Cash circulating outside of banks in Kenya experienced its most rapid decline in five years, dropping by Sh13.3 billion ($100 million) to reach Sh268.8 billion ($2 billion) in January this year, Kenyan Business Daily revealed, citing data from the Central Bank of Kenya (CBK).
The development marks the largest decrease in 52 months, since the peak of the four-month demonetization phase in September 2019, when cash outside banks fell by Sh28.4 billion ($214 million), the media noted.
The reduction observed in January reportedly reflects a downturn in spending following the festive season surge in December. During this time, there's typically increased demand for cash as Kenyans settle various expenses, including back-to-school costs amidst rising living expenses.
In January, the decline was further influenced by government efforts to withdraw currency from circulation through the issuance of Treasury bills and bonds, according to media reports.
The impact of tax changes from the Finance Act 2023, particularly on vehicle advance rates, also reportedly contributed to the January decrease in cash circulation. Furthermore, inflationary pressures from rising food and energy prices reduced disposable incomes during the month.
Flag of Kenya - Sputnik Africa, 1920, 22.03.2024
Sub-Saharan Africa
Kenyan Treasury Upgrades Country's Economic Growth Forecast for 2024
In other Kenyan financial news, in mid-March, Kenya's National Treasury & Economic Planning presented the Kenyan government's economic plan outlined to the end of 2027.
According to the Treasury's forecast, the country's economy will grow by 6.3% this year, up from 6.1% in 2023. President William Ruto during the presentation also noted that in the next four years, the government will focus on increasing production through value chains, particularly in leather and leather products, textiles and garments, dairy products, tea, rice, edible oils, blue economy, minerals, forestry, construction, among others.