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Coin demand is rising in Australia

Categories : Cash facilitates budgetary control, Cash is efficient
December 6, 2016
Tags : Australia, Demand, Ease of use, Trust, Uncertainty
Australia's demand for coins has surprisingly grown. The reasons being cited are people's loss in confidence in other payment methods, their desire to have something more concrete to make their payments as well as maintain their anonymity.
Communication Team / Equipo de Comunicación

The Royal Australian Mint recently reported an unexpected rise in the demand for coins due to an increased demand for cash. Indeed, figures of the annual report show that a total value of $140 million coins were put into circulation during 2015-16 financial year, the highest amount since 2009-10.

According to Ross MacDiarmid, Chief Executive of the mint, many reasons could explain the rise. First, in a context of economic uncertainty, people might have decided to get back to a more reliable and tangible payment instrument, which also offers anonymity. In addition, customers may have lost trust in modern technologies, notably after nationwide outages occurred.

Besides, studies demonstrate that people tend to spend less when paying cash rather than when using a credit card. As a consequence, banknotes and coins are often preferred because of their budget control properties. Steve Worthington, adjunct Professor at Swinburne University, added that many Australians might be hoarding money in cash rather than in a bank account because of the extremely low interest rates, and also because they might feel more comfortable when having concrete money with them.

As of now, about 5 billion coins and 1.3 billion banknotes are in circulation in Australia.

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