The Bank of Tanzania announced that the country had halted the exchange of new Kenyan bank notes with immediate effect.
According to the Tanzanian bank regulator, the move was aimed at curbing the flow of illicit Kenyan currency into the country.
“With a view to combat illicit financial flows and counterfeits into the Republic of Kenya, the Bank of Tanzania has been advised to freeze CBK Currency Collection Account with immediate effect,” the bank of Tanzania wrote to all its financial institutions.
This comes as a blow not only to perpetrators of money laundering but also Kenyan traders seeking to exchange money to trade in Tanzania.
On June 1, President Uhuru Kenyatta unveiled new bank notes to the public and announced plans to phase out old generation Ksh1000 notes by October 1.
CBK Governor Patrick Njoroge announced on June 3 that he would be reaching out to other regulators in the region to ensure a smooth transition from old to new bank notes.
‘’We are going to work closely with every stakeholder in the financial sector including our sister Central Banks in the region to ensure a smooth transaction and fight against illicit financial flows,’’ Njoroge stated.
Kenyan citizens who want to exchange amounts between Ksh1 million and Ksh5 million will need to go to their own banks.
People who want to exchange amounts above Ksh5 million will need to contact the CBK.
Those who do not have bank accounts and want to exchange this amount will need to contact the CBK which will then endorse them and they can go to a designated bank branch.