The contract, which was three times cheaper than the original deal, was to print currency for three years from a De La Rue plant in Malta, as doing so at the Ruaraka-based plant was more expensive.
He said CBK was "pennywise and pound-foolish" to agree to the contract, only driven by the least cost of production factor and ignoring other long-term implications.
"If you look at the convoluted manner that this contract was done by CBK, you would appreciate that it was a disaster and one that was not done in the best interest of the country," said Kimunya.
To substantiate his claim, Kimunya said the contract for printing 1.71 billion pieces of currency would have been done outside the country at a cost of Sh4.2 billion for a period of three years.
He argued that after this time, when the contract would have expired, the country would be required to enter into another contract, which would have seen the Government spend a similar amount.
Kimunya argued that Kenya would have spent Sh8.4 billion in six years through the cancelled contract, yet it has now spent only Sh4.8 billion in five years to print a similar number of currency pieces.
The minister said it would have been irresponsible for the Government to agree to a contract to print currency every three years, changing designs every time a new contract was procured.
But committee member Dr Nuh Abdi contradicted Kimunya, saying it was not necessarily true the country would have been forced to print new currencies after the expiry of the contract.
Defending his position that the contract was disastrous, Kimunya said it had been taken without consultations with other key players, such as banks, who would have been forced to configure their ATMs to suit the new currencies.
Kimunya said CBK had not factored in its plans how the bulky cargo of currencies, which were to be printed in the De La RueÂfs plant in Malta was to be transported from Mombasa port and stored.
"When I raised these issues with CBK, I was informed that they intended to transport the bulk through railway then take over Times Towers from Kenya Revenue Authority (KRA) for storage of the currency, and also get other go-downs in Kisumu, Eldoret and other towns for the purpose. That would have been a great security risk," he said.