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Why Some Coins And Notes Are Not Used Today

By stbrians | Recite Into Insights | 9 Dec 2022


Preamble

The world's nations at large have had a share of ups and downs in currency history.  There are many countries that have gone a complete metamorphosis in their use of fiat money.  Fiat money is often controlled by the Central Banks of the various countries. While some countries have realized a complete metamorphosis and their financial systems are far advanced,  others are still struggling. 

 

History of money dates back into 1700's when barter trade began fading out and fiat money slowly came into existence.  The circle is still revolving in many areas of the world.  A decade to come and the system will have changed completely and we will be singing a new song. 

 

The British Controlled Areas of East Africa. 

By the year 1921-1969, the East African board used to issue the East African Shilling which was used by all the British controlled areas of East Africa.  Kenya was among this countries. 

 

The currency issued included coins and notes.  The notes were in denominations of Sh. 5, 10, 20, 100, 200, 1000 and 10000 respectively.  Coins were in denominations of 1 cent,  5 cent,  10 cents,  50 cents,  and 1 Shilling.  20 shillings was equivalent of 1 British pound of those days. 

 

The coins used to have a hole in the middle which one could pass a string through and hold them in place even to tie around ones waist for security.  By then the coins and notes were very valuable.  There were people who lived many years and never have to earn a note in their lives. 

 

Kenyan fiat money came into existence in the year 1967 which was about 4 years after independence.  The money was issued by the Central Bank of Kenya (CBK).  They were in denominations of 5 cents,  10 cents,  25 cents,  50 cents and 1 shilling coins respectively.  Notes wearing denominations of 5, 10, 20, 50, 100, and later 200, 500 and 1000 shillings. The abbreviation for Kenya Shillings is Ksh. with a sign = used after the amount to denote shillings.  Ksh.  is used before the amount eg Ksh. 50 or 50= respectively. 

 

How Some Coins And Notes Came Out Of Circulation.  

Some coins and notes are not in circulation today.  While one Great Britain Pound (GDP)  used to be equivalent to Ksh. 20, now 1 GBP is equivalent to Ksh. 150.77. It means one has to have more Kenyan shillings to purchase the GBP.  This means the Kenyan Shilling has depreciated in value.  One therefore need too many small valued coins and notes to acquire the equivalent in value of the other Fiat money of other countries.  Therefore countries abandon the printing and use of the small denomination fiat and introduce large valued ones. 

 

The first to go out of circulation was 1 cent. 100 cents made one Kenyan shilling.  Therefore to get 1 GBP, one needed 150.77 multiplied by 100 which equals to 15077 1 cent coins.  It is pointless when you can only have 1 note of Ksh. 200. It was followed by all the other cents leaving only 1 shilling coins.  As per the present,  Ksh. 1 and 5 are also disappearing into oblivion. 

 

The CBK of Kenya has made other coins, like 5=, 10=, 20=,  and 40=. Small notes like the ones of 5=, 10=, 20= have and are easily slipping into oblivion. 

 

That is how and why some fiat money is not into circulation. 

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stbrians
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