By Mercy Imali
The Bank of Tanzania has frozen exchange of Kenyan bank notes with immediate effect.
Through a letter addressed to all financial institutions, the Tanzanian bank regulator on Friday said the Central Bank of Kenya had informed it of issuance of new series of banknotes starting May 31st.
In an effort to combat illicit financial flows and counterfeits into Kenya, the Bank of Tanzania was advised to freeze the CBK Currency Collection Account with immediate effect.
Thus anyone with old Kenyan notes in Uganda and Kenya will have to carry them to Kenya to replace them with new ones subject to CBK’s guidelines.
The move is a huge blow to perpetrators of illicit financial flows who had sneaked huge amounts of Kenyan currency into the neighbouring nations.
It also affects Kenyan traders seeking to exchange money as they trade in Tanzania and Uganda.
Kenya unveiled new currency on June 1st.
Speaking to journalists on June 3rd, CBK Governor Patrick Njoroge said, “We are going to work closely with every stakeholder in the financial sector including our sister Central Banks in the region to ensure smooth transition and fight against illicit financial flows.