Argentina sees cash in circulationThe value (or number of units) of the banknotes and coins in circulation within an economy. Cash in circulation is included in the M1 monetary aggregate and comprises only the banknotes and coins in circulation outside the Monetary Financial Institutions (MFI), as stated in the consolidated balance sheet of the MFIs, which means that the cash issued and held by the MFIs has been subtracted (“cash reserves”). Cash in circulation does not include the balance of the central bank’s own banknot... More grow by 62%

In Argentina, according to central bank data, currencyThe money used in a particular country at a particular time, like dollar, yen, euro, etc., consisting of banknotes and coins, that does not require endorsement as a medium of exchange. More in circulation grew by 165 billion pesos between March 7 and April 7. This represents a growth rate of 14% over the past month or 62% over the past year. According to media reports, the confinement policies have led families to withdraw record levels of cashMoney in physical form such as banknotes and coins. More. One of the Central Bank’s main concerns was to ensure ATMs were replenished, particularly for the long Easter weekend.

Australia sees elevated cash demand

In Australia, the Reserve BankSee Central bank. More has reported in its Financial Stability Review that over-the-counter withdrawals of cash from banks were elevated over the second half of March as some customers with large balances sought to hold precautionary funds. This included a small number of customers making very large withdrawals (over $100,000, and in some cases into the millions of dollars). The Reserve Bank worked closely with the large banks and cash-in-transit companies to ensure branches had sufficient cash supplies.

The Sydney Morning Herald reported on April 9 that “Australians did not just hoard loo paperSee Banknote paper. More and tinned tomatoes as the coronavirus pandemic spread through the country last month – they started stockpiling cash.”

The euroThe name of the European single currency adopted by the European Council at the meeting held in Madrid on 15-16 December 1995. See ECU. More area sees the highest jump in cash demand since the GFC

In the euro-area, the value of euro banknotes in circulation has increased by the largest amount since the 2008 financial crisis, according to new data from the European Central Bank. During the month of March, the value of banknotes in circulation increased by €36 billion to a record €1,314 billion. This represents a year-on-year increase of 8% and is the strongest increase since October 2008, following the collapse of Lehman Bros.

One third of the growth, has been captured by the €200 denominationEach individual value in a series of banknotes or coins. More which indicates an increase in store of valueOne of the functions of money or more generally of any asset that can be saved and exchanged at a later time without loss of its purchasing power. See also Precautionary Holdings. More demand. However, transactional denominations have been increasing as well and this is rather counter-intuitive as many media have been reporting that consumers had been shifting to digital payments and contactless payments in particular for fear that banknotes could contribute to spread the virus.

Banknotes in Circulation, in value

Source: European Central Bank

Could consumers be applying Gresham’s law? Named after English financier Sir Thomas Gesham (1519-1579),  the law states that ‘bad moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More drives out good money’, in other terms people prefer to spend the ‘bad money’, in our case contactless cards and hang on to the ‘good money’, i.e. notes and coins.

In the US, currency in circulation grew by over $70 billion

In the US, currency in circulation grew by over $70 billion between March 3 and April 1, to $1,876 billion, representing a 4% increase. This exceeds the spike that followed the collapse of Lehman Brothers in September 2008.

Source: Board of Governors of the Federal Reserve System (US), Liabilities and Capital: Other Factors Draining Reserve Balances: Currency in Circulation: Week Average [WCURCIR], retrieved from FRED, Federal Reserve Bank of St. Louis

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