This trend was highlighted in the latest Survey on Cross-Border Movement of Cash, which revealed that 15 commercial banks representing 39.4% of all licensed banks in Kenya are engaged in cross-border cash shipments.
The report, compiled by Kenyan financial authorities, underscores the scale and complexity of physical currency movements in and out of the country.
According to the Central Bank of Kenya (CBK), the primary reasons Kenyan banks transport physical cash across borders include the repatriation of foreign currency and the need to ensure operational efficiency by meeting the liquidity demands of their foreign subsidiaries.
In a report released on Wednesday, July 2, CBK noted that the main source of the transported cash is customer deposits held across local branches.
Additional sources include group subsidiaries, currency exchange agencies, and central banks of other countries, highlighting the diverse financial networks involved in cross-border cash movements as per Kenyans.co.ke
According to the report, the United Kingdom emerged as the leading destination for physical cash outflows from Kenya, accounting for 42% of the total.
The United States followed with 15%, Switzerland with 12%, and Germany with 4%.
The UK’s central role in hosting foreign accounts for Kenyan banks, businesses, and government institutions is closely tied to the deep and historic ties between the two nations.
According to the UK Foreign, Commonwealth and Development Office, the UK was Kenya’s fifth-largest export destination in 2022 and remains the largest international investor in the country, accounting for 14% of Kenya’s total stock of foreign liabilities.
These enduring trade, financial, and diplomatic ties help position the UK as a key hub for Kenyan foreign accounts and currency repatriation.
Regionally, South Sudan accounted for 15% of physical cash shipments, while the Democratic Republic of Congo (DRC) received 8%.
The most commonly transported currencies were the US dollar, euro, and British pound, reflecting the global nature of Kenya’s financial networks and the liquidity needs of its banks abroad.
While the United Kingdom topped the list of destinations for Kenya’s physical cash exports, the US dollar was the most frequently moved currency. This highlights the dollar’s dominance in international finance and the UK’s pivotal role as a global financial hub facilitating multi-currency operations.
Kenyan regulators have emphasized that all such operations are carried out under strict compliance frameworks, including anti-money laundering (AML) and know-your-customer (KYC) protocols.
Nonetheless, the rising volume of physical cash exports has prompted renewed calls for tighter oversight, especially in the context of growing global concerns over illicit financial flows.
