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Poland: Cash Circulation, Infrastructure and Withdrawals

Categories : Cash and Crises, Cash is available to all users, Cash is the most widely used payment instrument
April 22, 2022
Tags : Banknotes, Cash Infrastructure, Covid-19, Poland, Ukraine
Cash remains the dominant payment instrument in Poland. In January 2021, currency in circulation grew 39% year on year due to increased precautionary demand. Cash spiked after the Russian invasion of Ukraine in February 2022.
Manuel A. Bautista-González

Ph.D. in U.S. History, Columbia University in the City of New York

Post-Doctoral Researcher in Global Correspondent Banking, 1870-2000 – Mexico and South America, University of Oxford

This post is also available in: Spanish

Cash in Circulation

Cash remains the most frequently used payment method in Poland. According to the “Payment habits in Poland in 2020” study, 97.8% of respondents said they prefer to use cash in payments (NBP 2020: 8-9). Poland’s cash payment limitations are less restrictive than other European Union members states. Cash on delivery is a popular payment method in the country.

Graph 1. Poland: Currency in Circulation, December 1996-February 2022

Note: Series excludes cash in monetary financial institutions’ vaults. Source: NBP Monetary and Financial Statistics, (M3 and its counterparts – balance sheet format).

Structure of Cash in Circulation

The value of banknotes and coins in circulation in Poland equalled 389.4127 billion Polish zloty (PLN) during the first trimester of 2022, according to NBP data. The banknotes with the most pieces in circulation are the PLN100 (with 55.97% of Polish banknotes), and the PLN200 (24.12% of all banknotes).

The PLN500, the highest denomination banknote launched in 2017, comprises just 2.06% of Polish banknotes. The dominant coins are the 1-grosz (37.49% of all coins) and the 2-groszy (16.55% of Polish coins).

The PLN100 and the PLN200 banknotes grew the most during the Covid-19 pandemic. Like other countries worldwide, an increase in Polish consumers’ precautionary demand for high-denomination banknotes more than compensated for the decline in their transactional demand for cash.

Graph 2. Poland: Structure of Banknotes in Circulation, 2007Q1-2022Q1

Note: Series excludes cash kept in NBP’s counters and vaults, cash owned by NBP and deposited in commercial banks’ vaults, and cash unfit and withdrawn from circulation by NBP. Source: NBP Monetary and Financial Statistics (Banknotes and Coins).

The Cash Infrastructure: ATMs and CRMs

In 2016, Poland and Turkey were the only two European countries with a growing ATM base. The number of ATMs in Poland expanded from 8,054 in 2004Q4 to 23,751 in 2017Q1. Poland’s cash terminals have declined since then, albeit slowly. Poland had 21,396 ATMs as of late 2021. Cash Recycling Machines (CRMs) grew from 3,468 in 2015 Q2 to 9,343 in late 2021.

Graph 3. Poland: ATMs and CDMs, 2004Q4 -2021Q4

Note: ATMs: automated teller machines; CDMs, cash deposit machines. Source: NBP Payment System in Poland – Payment Cards (Number of ATMs. Value and volume of AT transactions since 1999).

In 2015, Poland’s Idea Bank launched a fleet of electric cars fitted with ATMs. A year later, Idea Bank’s fleet had grown to 18 mobile ATMs in 12 cities: “One in three Polish micro-entrepreneurs accept only cash payments, and almost four out of five deliver income to their bank in person. By providing them with a convenient and secure way of depositing money, we have made their day-end business closing much easier,” said Dominik Fajbusiewicz, board member of the bank.

Cash Withdrawals

Cash withdrawals by volume grew from 2004Q4 to 2014Q2, declining after that. Their worst fall occurred in 2020Q2, coinciding with the emergence of the Covid-19 pandemic. By value, cash withdrawals grew from 2004Q4 to 2019Q3.

Graph 4. Poland: Cash Withdrawals by Volume (Millions of Transactions, left axis) and Value (PLN billion, right axis), 2004Q4 -2021Q4

Note: ATMs: automated teller machines comprise terminals offering only cash withdrawals and recyclers. CDMs: cash deposit machines include terminals offering only cash deposits and recyclers. Source: NBP Payment System in Poland – Payment Cards (Number of ATMs. Value and volume of AT transactions since 1999).

Polish consumers used ATMs less during the pandemic, but they withdrew the same or even more cash as before. The NBP thanked “professional cash cycle participants for their commitment to ensure that society has uninterrupted access to cash.” Increased cash withdrawals “were not made for the purpose of executing transactions, particularly in the initial period of the epidemic, but primarily for value storage and precautionary purposes, resulting from bank customers’ concerns about the crisis situation” (NBP 2020: 2).

Converting Hryvnia to Zloty

Per the NBP, currency in circulation rose 11% in February 2022 because of “unprecedented withdrawals” that caused “problems with the availability of cash in ATMs” in the first weeks of the Russian invasion, reported the Financial Times. The increase results from the public’s dash for cash amid uncertainty and the exodus of refugees fleeing the war in Ukraine.

Poland has received more than 2.1 million Ukrainian refugees since the Russian invasion began February 24. Many refugees left in haste, often carrying funds in cash. On March 8, the National Bank of Ukraine (NBU) urged refugees to “deposit their hryvnia cash into their card accounts in Ukraine rather than moving it out of the country as they leave.”

On March 18, the NBP and the NBU agreed on a mechanism to enable Ukrainian refugees to exchange Ukrainian hryvnia (UAH) for Polish zloty (PLN) at the “rounded, official exchange rate (and not the one offered by exchange offices).” Starting on March 25, Ukrainian refugees could exchange up to UAH10,000 in selected branches of PKO Bank Polski, the largest Polish bank.

Over three days, more than 13,000 Ukrainian citizens exchanged their hryvnias. No participant charged exchange fees. NBP will resell the purchased hryvnias to the NBU at 0.14 PLN per 1 UAH.


This post is also available in: Spanish