Has a Plot Been Hatched to Print Extra Pre-poll Campaign Currency?

A contact in the Kenyan banking industry has whispered that there are internal banking signals of  wash wash money or fake currency that have been detected in some of major towns especially rural areas in Mt Kenya Region, Coast, Rift Valley and Western.

It  is believed that these fake currency, if printed in large scale,  could have a negative effect on our economy especially managing fiscal inflation as we move towards highly charged 2013 elections.

It could be reminiscent to previous multi party elections, especially after 1993, when the shilling fell by a huge percentage following  state sanctioned heavy printing of local currency by the Central Bank of Kenya that was used to finance pre-election spending for the first multiparty elections of 1992. Similar trends were observed after the 1997 general elections. While in the 2002 elections the shilling remained stable against international currencies, in the half-year before the last violent 2007 elections, the shilling gained an average of more than 10% against international currencies.

The local contact further adds that financials instituion have been put on high alert to be extra vigilant when collecting cash from customers and report on unique banking behavior.

Is there anyone out there with insider knowledge to lend credence of the above and update the nation of what is going on in the Kenyan Banking Sector?

One comment on “Has a Plot Been Hatched to Print Extra Pre-poll Campaign Currency?

  1. Phil,

    The Kenyan economy was poised for a currency printing exercise with or without the elections. Kenya has just had to endure strikes and the government essentially relented and offered raises to teachers, etc. There are two ways of getting around it, raising taxes and/or printing currency. MPESA is now being targeted, alcohol is also being targeted, with that said, those additional taxes are unlikely to get the additional 40 billion. As things stand there are enough checks and balances to avoid such an eventuality. The entire cash creation process has to be initiated by the government in the form of a debt, and with the provisions of the laws of the constitution, there is no way the country will initiate such a process without involving parliament. The only way that the process can be circumvented is through out and out counterfeiting…..


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