We won’t issue new coins despite current shortage: CBK boss

The shortage is attributed to coins not circulating freely, some banks charging customers to deposit coins, some kiosks and shops not accepting certain denominations of coins, and people not carrying coins while going for shopping. Photo|FILE

What you need to know:

  • Central Bank governor Njuguna Ndung’u said issuing new coins as a temporary measure will not work, given that there have been persistent complains regarding shortages despite the fact that new coins have been released into the market over the past two months.
  • He said the bank is engaging different players to find sustainable ways of putting coins already issued into circulation, rather than merely issuing new ones.
  • The campaign, dubbed Chomoa Coins, will end on December 7. CBK said that as at November, it had issued over 1.31 billion coins valued at Sh5.1 billion in different denominations.

The Central Bank of Kenya will not issue new coins to stem the current shortage experienced across the country.

Central Bank governor Njuguna Ndung’u said issuing new coins as a temporary measure will not work, given that there have been persistent complains regarding shortages despite the fact that new coins have been released into the market over the past two months.

Addressing players from the banking, retail and media industries, he said the bank is engaging different players to find sustainable ways of putting coins already issued into circulation, rather than merely issuing new ones.

Efficient mechanism

“The problem of inadequacy of coins in circulation cannot be addressed by adding new coins but by ensuring that there is an efficient mechanism for re-circulating coins within the economy,” Prof Ndung’u said while launching a national coin week on Monday.

The campaign, dubbed Chomoa Coins, will end on December 7. CBK said that as at November, it had issued over 1.31 billion coins valued at Sh5.1 billion in different denominations.

In October alone, the bank released nine million coins and a further 12 million pieces this month. Yet the challenges on coin circulation still persists in some segments of the market.

“We believe that the bulk of the coins are held by members of the public either in their homes, offices or car pouches. Is it becoming expensive to make trips to the bank for coins?” Prof Ndung’u asked.

The shortage is attributed to coins not circulating freely, some banks charging customers to deposit coins, some kiosks and shops not accepting certain denominations of coins, and people not carrying coins while going for shopping.

Retailers say it is becoming increasingly difficult, costly and risky to collect coins from the public to meet customer needs.

“We have even invested in pick-ups to go out there to collect coins, but it is quite hectic and expensive to us. The cost to us is approximately Sh260,000 per month.

"Last year, we spent Sh3.6 million to collect coins,” Naivas Supermarket business development manager Willy Kimani said.

Some retail outlets are, however, moving to mitigate the problem by loading low denomination balances on customers’ loyalty cards and related prepaid credit cards.