Cash and Crises

As the Taliban resume their rule, Afghanistan runs out of cash and hard currency. U.S. dollar and afghani shipments have ceased, its international assets are frozen, and international aid has halted.

The British public is sitting on piles of loose change worth an estimated £50 million. Along with the Charities Aid Foundation, UK Finance is asking people to consider donating some of this spare change to charity.

As U.S. and European troops departed, foreign currency shipments to Afghanistan stopped. As a result, Afghans face an acute cash shortage in the early weeks of the second Taliban regime.

Ghanaian authorities have been promoting digital payments well before the Covid-19 pandemic. However, currency in circulation is growing at a faster pace than digital payments.

During the Covid-19 pandemic, digital payments did not overtake cash as the main payment instrument in Nigeria, despite initiatives and incentives from the banking sector and fintech firms.

A recent ECB paper assesses changes in cash circulation during the Covid-19 pandemic and examines the role of cash as a possible transmission vector of the SARS-CoV-2 virus.

An ECB study belatedly confirms that cash is safe to use despite the SARS-CoV-2 Virus. The SARS-CoV-2 virus lasts longer on stainless steel than on banknotes and euro coins. PVC and stainless steel are more likely to transfer the virus than cash.

Cash in circulation increased in the euro area during the first year of the Covid-19 pandemic. An increase in the precautionary demand for cash more than compensated the decline in its transactional demand. Fears over the role of cash in Covid-19 transmission weighed down on its use in payments.

Riots resulted in the destruction of bank branches and ATMs and the suspension of banking and cash management operations in South Africa. However, industry stakeholders secured business continuity in the provision and circulation of cash.

Cash in circulation grew markedly during the first year of the Covid-19 pandemic in South Africa. The country’s central bank implemented several measures to protect the cash supply chain in times of unprecedented economic dislocation.

Available statistics show that most countries around the world experienced a run for cash in 2020 due to the Covid-19 pandemic.

Myanmar (Burma) is facing a severe cash shortage as the central bank is not providing sufficient cash to meet demand. Queues are growing at ATMs and bank branches, raising fears of a banking crisis.