Cash held outside Kenya’s banking system expanded at a faster pace in the 2024/25 financial year, with currency in circulation rising 7.0% year on year to KSh 357.02 billion, as withdrawals from the central bank continued to exceed deposits even as overall currency flows slowed.
- •The stock of currency increased by KSh 23.2 billion in the year to June 2025, accelerating from 5.6% growth in the previous year, according to the Central Bank of Kenya.
- •The rise marks a shift in liquidity behaviour, with commercial banks withdrawing more cash from the central bank than they returned over the period.
- •The net outflows of KSh 23.23 billion closely matched the annual increase in currency in circulation, confirming that the rise in cash stock was driven by net liquidity demand rather than higher cash turnover.
CBK data show that cash movement through the banking system slowed on both sides. Currency inflows, representing deposits by banks to the central bank, fell by 7.8% to KSh 476.32 billion from KSh 516.85 billion a year earlier. Currency outflows, reflecting withdrawals by banks, declined by 6.6% to KSh 499.56 billion from KSh 534.71 billion.
Despite the slowdown in gross flows, withdrawals continued to exceed deposits. This resulted in net outflows of KSh 23.23 billion, reversing net inflows of KSh 17.86 billion recorded in 2023/24.
Banknotes drove almost the entire increase. Notes in circulation rose to KSh 345.64 billion from KSh 322.77 billion, a 7.1% increase, while coins edged up by 3.2% to KSh 11.38 billion. Banknotes accounted for more than 98% of the annual expansion in currency stock.
CBK said the increase was attributable to a greater volume of currency withdrawals than deposits. The concurrent decline in inflows and outflows indicates slower recycling of cash back into the banking system, with banknotes remaining in circulation for longer periods once withdrawn.
