 We are staying with us and if you are just tuned in, this is Y254 Business Tuesday and tonight we are talking about the new currency. We have seen Kenyans react in different ways in regards to the new notes that we have seen. Even politicians have not been left at an arm speaking to Paul Mwangi, he is a financial analyst. We will understand at what point should we be worried of this new currency, is it bringing problems, will we be able to adjust, so keep it Y254. Remember to share your comments or questions on all our social media platforms at Y254 channel and my handle is Art Morani, Hilary, welcome to the program again. Good evening sir. Good evening to you. Good to have you. Thank you. Now we have seen actually Kenyans and our country we saw a new note being introduced on Madaraka Day by the CBK president and our Kenyans reacted differently in regards to this money and we have seen even the neighboring countries react differently because it will affect them in a way and for us to begin with we have seen people appreciating others are not appreciating. I want to begin with you. How do you receive this message? How do you receive these notes? Well everyone of us reacts in a different way to something new in the market or in the marketplace. Now the currency what CBK is trying to do is to demonetize which simply means they are trying to introduce to remove the old series notes from the system and coins as well from the system and bring in new series notes. They've started with the we know that all the notes we have a new series for the same. But now there is a big problem. Which is? The problem is that people who are not very clean, the parallel economy, the black market has already beaten CBK to introducing their fake currencies. So before you even know how the new currency looks like you already have counterfeit. Exactly. So that is one very big challenge. So much as CBK is telling us that we have a new currency I won't know how it looks like because I've not touched it. So if I got hold of the fake currency it would be a problem for me. We had an issue the other day in Busea where a taxi driver was paid 3000 for his services. No brother it was in Muayale and he didn't know whether this was genuine or fake currency. So unfortunately he ended up getting the hands of the law as a result because only one of the three notes was genuine. So there is that big problem. And now actually now with the problem because this money before it was released to the market it has been advertised like every single day on every media platform even including mainstream media and it was explained how it looks like. Okay I may I may want to understand people from the other side of the country but again there were clarifications how this money looks how even including the touch the feel of it but now we've okay it's true we found people who are coming up with this thing now what should have cbk done before releasing the money because it has problems people getting fake money what should they have done and we had to change unfortunately cbk did everything they could have done but these are even challenges it has happened elsewhere the other day it happened in 2016 it happened in India it started all the way back in 1982 with Ghana so when a new currency is introduced unfortunately such tiling problems are bound to occur all right and this very little little unfortunately that cbk can do because remember one of the reasons why cbk is introducing the new currency is in response to the requirement in the law all right article 232 sections 2 and 4 of the constitution requires that we have new currency that do not carry portraits of individuals all right actually before we get there the money was released and at this point we have information there is fake currency going around because it was introduced lacking knowledge to some of our kenyan or a sum of kenyans but now it is out here what should be done cbk has to continuously educate the people i want to appreciate dr patrick george the other day i saw him in nyarenda in nakisumu he was showing people what to look for in the currency when they have it at hand not on the screen yeah so that campaigns should now be more aggressive all right yes and when they do this do think even the people who make counterfeit money have something to bring closer to what is there with the security features they will definitely be beaten okay yes all right now let's talk about the constitution changing the currency we saw senator orango among other leaders saying this currency has been brought but it still have portraits of of the founding father mzejomo kenyata it's against the law but also there are people who will associate all who feel the they have a relation with this currency because it has this unless you see a bcd this not kenyan money unless you have seen ksc in our money or something else you will not know this is kenya like other countries there are things that you will identify with now what's the problem with having ksc and of course the portrait of mzejomo kenyata legal speaking probably somebody might have a problem with a portrait but remember this is not a portrait actually it's a monument a monument that carries the image of the founding our founding president so the interpretation of the law unfortunately we will leave it to the legal mind all right yes okay so they do feel they should according to your own opinion do you think they should change or it should just stay i may not have a problem with what we currently have in the currency so if it was up to me it would remain remember we have a high cost of the printing the money so making a whole sale change to the currency will definitely be expensive all right we've also have a group of people who are complaining and these are our brothers and sisters who have disability in either partially or a complete blind they use brails but this currency has been has some strokes but the brails i have dots now this is something they feel like we were left out we were not consulted they feel like they don't have a sense of belonging do you agree with the people who are most affected who could be most affected by the new currency are the people who cannot see the blind but other what do i say people living with the disabilities like the partially blind fortunately have been well taken care of so what i believe needs to be done is to retrain these people we need to take our time and retrain them because we do not want them being left out you don't want anybody to feel left out by the new changes so i believe the government can take some time to at least train these people but the majority of the others have been very well trained rather have been very well taken care of in terms of those bars that you see there yeah all right now before we get to the economical problems and actually the relations between our neighboring countries and other countries rather we have a problem with the colors and we have a problem with the size there are a group of people who feel this size is very much comfortable but there are people who believe a thousand k should be big enough like it has been actually it should have been bigger because when you have a thousand k means okay i'm good should it should it be this way or we had a better one in terms of size honestly what matters is the value because if you compare the older series a thousand shillings with say a hundred dollars the hundred dollars which is much smaller in terms of size is 10 times bigger in terms of value it's 10 times more value so it's not really about the size sizes don't matter yeah okay yes now let's speak economically yes i saw people getting this money and they're like okay is this our money we hear this new money but they feel like they haven't embraced that change but now let's look at this this look at this way kenya yuganda since its inception yuganda had a problem in the first few days they wanted to know the clear communication from cbk from from kenya that is now how much damage did the change of currency bring in terms of economy because we have to trade with them anyway and when i speak of yuganda i also speak of Tanzania, Rwanda and Burundi one of the reasons why there is some confusion around the borders is because of the color changes had cbk maintained the old colors this confusion will not be there because if you look at our kenyan a thousand shillings today it looks very similar to the yugandan ten thousand a thousand shillings and so does the 200 shillings look like the 5000 shillings so as a result of course cbk had to intervene and talk to the federal reserve banks the the simple banks in yuganda and tansania to freeze trading of the currency so that of course has an effect around the border because around the border economies because people will still want to trade in the in the in the currency that they are used to uh like yesterday not today today actually the kenyan shilling was a trading at about that three shillings from a high of 37 two weeks ago in yuganda around ebusia so what does that mean the kenyan shilling weekends in the relation to the to the foreign currency that you are looking at uh so that could be a short term uh implication negative implication that the currency could have and economically speaking how long will this take well there is a transition period let's first talk about the a thousand shilling note that is being recalled in totality the period that was provided is four months exactly four months from january eradai june first to to october first that's exactly four months that is sufficient enough time that will help avoid a liquidity crunch where we do not have either too much of the currency in supply or too little of it either when the currency is too much we definitely have the inflation or when it's too low we will have the deflation so that period could be sufficient to avoid that but we have a group of people who feel like this four months period is very little we need more because actually they may have okay there has been a political thing about it but also people feel like this four months there's someone who was investing for this one thing of course if the money is in the bank when he gets out it will be the new currency but there are people who feel like no no no no no we have so much to spend before this time ends and maybe someone is not in the country they have to come back as i'm assuming someone was had some money somewhere and they want to come back for them to change do you feel do you feel this period is too little i believe it's sufficient enough because honestly people should not keep so much money at home unless it's money that was illegally acquired exactly so anybody i feel that anybody who has such money in the house will not have a problem explaining to the to the system when they take back the money to exchange with the new currency why they held those huge sums of money so i don't i think this is this period is sufficient to allow for that all right now do you think also this four period four months period is in a way to bring some sanity and some discipline especially when it comes to drug dealing and money laundering now that is what we call the parallel economy in one way to the small time dealers it could have an implication an advanced effect a negative effect to their business but to the big timers unfortunately they do not trade in the kenyan currency they do it terminally in dollars so they may not feel the heat all right yes all right as we finished we have less than a minute politically speaking do you think this new currency is in a way or will help kab corruption unfortunately there is no empirical relationship between corruption and currencies it is it some people have money in the house they'll have to change it anyway how did they acquire it so there is no empirical relationship between new currencies and corruption all right many thanks for coming and sharing your sentiments our team is up but we appreciate you coming and sharing some lights in regards to the new currency in note that has been released by the cbk he has been my guest paul mwangi he's a financial analyst and this has been business choose the many things for keeping us company back home my name is dereva hilawee i will see you again on a friday stay tuned have a good night