The Bank of Tanzania (BOT) has suspended its currency conversion with that of Kenya in a bid to check illegal cash flows.
In a statement addressed to all financial institutions issued on Friday, June 7, the country’ financial regulator said it was advised to suspend the exchange exercise by Central Bank of Kenya (CBK) so as to stop illicit cash flows.
“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,” a part of the statement read.
The development means that anyone with old Kenyan notes in Tanzania will have to take them to Kenya to change them for new ones subject to CBK’s regulations.
The move comes just one week after CBK launched the new Kenyan currency. CBK Governor Patrick Njoroge also said the old Sh1,000 note will cease to be legal tender in October this year.
The latest move is a big blow to Kenyan traders seeking to exchange money to trade in Tanzania where the currency is largely accepted.
This even after CBK last week announced it had asked sister banks in the region to alert it on any suspicious transactions.
Meanwhile, the CBK has outlined how to exchange the old Sh1,000 notes for the new ones.
If you have less that Sh1 million in the old notes you may not need a bank account. Visit any bank to have them exchanged.
If you have between Sh1 million and Sh5 million you will need to visit a bank to exchange the money.
If you do not have a bank account but hold this volume of cash, you will be required to contact CBK.