Cash held outside Kenya’s banking system rose more sharply in the 2024/25 financial year, with currency in circulation increasing by 7.0% year on year to KSh 357.02 billion. The expansion reflects a period in which commercial banks consistently withdrew more cash from the Central Bank of Kenya than they deposited, even as overall currency movement slowed.
According to CBK data, the stock of currency grew by KSh 23.2 billion in the year to June 2025, up from 5.6% growth in the previous financial year. The increase points to a shift in liquidity behaviour, with banks emerging as net cash takers from the central bank over the period.
Net withdrawals amounted to KSh 23.23 billion, closely mirroring the annual rise in currency in circulation. This alignment indicates that the growth in cash held outside the banking system was driven by net liquidity demand rather than an acceleration in cash turnover.
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At the same time, gross currency flows through the banking system declined. Currency inflows, representing deposits by banks to the CBK, fell by 7.8% to KSh 476.32 billion from KSh 516.85 billion a year earlier. Currency outflows, reflecting withdrawals by banks, dropped by 6.6% to KSh 499.56 billion from KSh 534.71 billion.
Despite the slowdown on both sides, withdrawals continued to exceed deposits, producing net outflows and reversing the KSh 17.86 billion net inflows recorded in 2023/24.
Banknotes accounted for virtually all of the increase in currency stock. Notes in circulation rose by 7.1% to KSh 345.64 billion from KSh 322.77 billion, while coins increased modestly by 3.2% to KSh 11.38 billion. Banknotes contributed more than 98% of the annual expansion.
The central bank attributed the rise to higher withdrawals relative to deposits, noting that the simultaneous decline in inflows and outflows points to slower cash recycling. Once withdrawn, banknotes are remaining in circulation for longer before returning to the banking system.
