The shilling is the official currency of Kenya. Like dollar currencies, it is subdivided into 100 cents. However, although cent-denominated coins are minted, they are rarely used today as most transactions are rounded to the nearest shilling. The Kenyan shilling was introduced in 1966 as a replacement for the East African shilling. Kenyan shillings are circulated through coins and banknotes issued by the Central Bank of Kenya.
The first official currency of Kenya was adopted in 1905, but it was not a Kenyan currency. It was the Indian rupee. When Kenya became a British colony in 1920, the Indian rupee was abandoned for a new rupee designated for East African protectorates. Shortly thereafter, this rupee was replaced by the East African florin. The florin turned out to be just as short-lived as its predecessors were, and it was replaced in 1923 by the East African shilling, which also came to be used by Uganda and Tanganyika. Use of the East African shilling took hold, and it was remained the currency of Kenya until the country gained independence in 1964.
Although a plan emerged for a new united central bank of East Africa, ultimately Kenya chose to go on its own and establish the Central Bank of Kenya. Coins were minted and banknotes were printed for the introduction of the Kenyan shilling in 1966. In addition to issuing currency, the Central Bank of Kenya is also responsible for implementing monetary policy, overseeing the national financial system, implementing foreign exchange policy, managing foreign reserves and acting as a banker to the government.
The primary industries of Kenya are agriculture and services. Agriculture provides the most jobs, but only contributes 24 percent of the GDP. Services, especially tourism, contribute the most to the GDP at nearly 63 percent. Although Kenya is an economic and financial hub for East Africa, its growth is hindered by several factors. Among the most limiting of factors is rampant political corruption. In the 1990s, Kenya implemented an Enhanced Structural Adjustment Program overseen by the International Monetary Fund (IMF), but the program was suspended in 1997 due to the country’s inability to reduce corruption and produce governmental and social reforms. Two years later, when the country was hit by a severe drought, the IMF bailed out Kenya again. However, aid was again halted due to a failure to implement effective measures to curb corruption. Some improvement has been seen since an opposition party took majority control of the government in 2003.