Kenya’s highest denomination banknote is becoming increasingly dominant in the country’s cash economy, with the Sh1,000 note accounting for 86.3 percent of the total value of banknotes in circulation at the end of 2025. The latest data from the Central Bank of Kenya (CBK) reveals a growing reliance on high-value notes even as digital payments continue to expand across the economy.
The value of banknotes in circulation rose to Sh388.41 billion in December 2025, representing a 7.8 percent increase from Sh360.46 billion recorded a year earlier. When combined with Sh11.52 billion worth of coins, total currency in circulation reached Sh399.93 billion. The increase follows the awarding of a new currency printing tender in August 2024, after which notes in circulation expanded from Sh278.64 billion to current levels, reflecting a 39.4 percent growth.
The Sh1,000 note has emerged as the primary driver of this expansion. Its share of total banknote value increased from 85.6 percent in December 2024 to 86.3 percent in December 2025, marking the highest level in more than a decade. In absolute terms, the value of Sh1,000 notes in circulation increased by Sh26.66 billion during the year, far outpacing growth in all other denominations.
By comparison, the value of Sh500 notes increased by only Sh51 million, while Sh200 notes grew by Sh568 million. The value of Sh100 and Sh50 notes rose by Sh427 million and Sh209 million respectively. The widening gap highlights how the economy is increasingly concentrating cash transactions around larger denominations.
The growing prominence of the Sh1,000 note reflects several economic realities. Inflation has steadily increased the value of everyday transactions, making higher-denomination notes more practical for businesses and consumers. The trend is particularly evident in sectors that remain heavily cash-dependent, including wholesale trade, transport, construction, and segments of the informal economy.
The shift is also visible in the declining importance of smaller notes. The Sh500 note, which previously accounted for more than 10 percent of the value of notes in circulation, now represents only 4.1 percent. Interestingly, the Sh100 note now holds a slightly larger share at 4.43 percent, underscoring the changing structure of cash usage.
Despite the rapid growth of mobile money, cash remains deeply embedded in Kenya’s economy. Cash circulating outside banks rose by 10.4 percent to Sh323.2 billion in December 2025 from Sh292.8 billion a year earlier, indicating increased economic activity and continued demand for physical currency. At the same time, the value of transactions handled through mobile money agents declined to Sh8.236 trillion from Sh8.697 trillion, suggesting that cash remains relevant for many transactions despite widespread digital adoption.
The dominance of the Sh1,000 note has become even more pronounced over time. In 2010, the value of Sh1,000 notes in circulation was approximately 7.1 times that of Sh500 notes. By the end of 2025, that ratio had climbed to 21 times, illustrating the growing preference for high-value currency.
This trend carries important policy implications. Globally, central banks often monitor the expansion of high-denomination notes due to concerns around money laundering, tax evasion, corruption, and the informal economy. Several countries, including India, Singapore, Nigeria, and Ghana, have previously reduced or withdrawn high-value notes to improve transparency and combat illicit financial activities.
Kenya itself undertook a major currency overhaul in 2019, withdrawing the old Sh1,000 note to curb illicit financial flows. During the demonetisation exercise, 209.66 million out of 217.05 million notes were returned, while Sh7.39 billion became worthless after failing to be exchanged. Although the exercise temporarily reduced the share of Sh1,000 notes below 80 percent, the new series has since regained dominance.
As Kenya balances the growth of digital payments with continued demand for physical cash, the resurgence of the Sh1,000 note highlights the enduring role of currency in supporting commerce. While mobile money remains a cornerstone of financial inclusion, the latest CBK data shows that large-denomination notes continue to serve as the backbone of cash transactions, reflecting both economic expansion and the practical realities of conducting business in an increasingly inflationary environment.
