By Andrew Irumba
The Bank of Uganda is yet to clear financial institutions in Uganda to start trading in the new Kenyan Shilling notes.As a result of this commercial banks, forex bureaus, microfinance institutions, and other currency traders are waiting for directions from BoU on how to proceed trading the Kenyan new currency notes .
It should be noted that Kenya’s old 1,000 note stopped being legal tender on Monday 30 September 2019, and it is no longer legal tender.But there is no deadline on the return of old Shs50, Shs 100, Shs 200.
Peter Mbowa, the head of treasury at Barclays bank (absa) Uganda, said they had not started trading in new notes. “The only trading of Kenyan shillings has been electronic but banks are reluctant to trade cash.”
Before trading the new notes, both Bank of Uganda (BoU) and Central Bank of Kenya (CBK) will have to pronounce themselves on how banks and forex bureaus can proceed going forward.
On the side of forex bureaus, the trading of cash has been on but also slow. The bureaus would take cash by themselves in Kenya for changing. According to some players, the uptake of new Kenyan notes remains low.
However, Ugandans trading the Kenyan currency have said there was no panic as the deadline for handing the old 1,000 Kenyan shillings passed Monday evening.
Mbowa said the central bank gave them a window and they were able to hand in all the old notes they still had.
An analyst at one of the banks said investors hate uncertainty and if they aren’t certain of central bank’s future actions, they will stay away from the currency – that is what happened with the Kenyan shilling.