Cash circulating in the country touched a record high of Sh267.7 billion in July as the country prepared for the August 9 polls.
Latest data published by the Central Bank of Kenya (CBK) show that cash outside the banking system rose by 6.5 percent from Sh251.4 billion in June to Sh267.7 billion in July.
The figure reduced slightly to Sh257.1 billion in August — the second-highest level ever, as Kenyans voted for their leaders.
The record figures seen in the two months point to the possibility that Kenyans withdrew cash and opted to keep it in their wallets in anticipation for disruptions brought by the polls.
The rise also points to the possibility that politicians withdrew large sums to facilitate their campaigns. Politicians spend millions in voter facilitation, advertisements, vehicle and equipment branding, and poster printing among others.
Voter facilitation, a practice that has become rampant, intensified in the August polls, driven by the high level of competition and high rates of inflation that have seen Kenyans struggle to meet their daily needs.
Average inflation for the first eight months of the year was 6.7 percent, pushing Kenyans to demand more money from politicians.
Some Kenyans may also have anticipated election disruptions, prompting them to withdraw their savings and stash money in their homes following recent experiences in election periods.
Demand deposits — cash saved in current accounts and available on demand — also hit a record high of Sh1.65 trillion in July, being a Sh106 billion rise from June.
The rise in demand deposits corresponded with a fall in time deposits — cash saved long-term — which stood at Sh1.57 trillion, the lowest since May last year.
Savings in current accounts at the end of August, however, declined slightly to Sh1.58 trillion as long-term deposits had a rebound to end the month at Sh1.64 trillion.
Foreign currency saved in local banks hit an all-time high of Sh905 billion in July, driven by the weakening of the shilling against the dollar but declined slightly to Sh896.2 billion in August. The shilling has depreciated by 6.8 percent against the dollar since the beginning of this year, attributed to strong demand for the American currency.
Global economic uncertainty arising out of the Russia-Ukraine conflict and high inflation in western countries has also strengthened the dollar — a safe haven asset — meaning that it pays for one to hold the currency for capital gains and a hedge against potential future economic upheavals.