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High-denomination Banknotes in Circulation: A Cross-country Analysis

Categories : Cash is also a store of value, Cash is universal
April 13, 2018
Published in : Australia, Canada, Denomination mix, UK
The Reserve Bank of Australia's March 2018 Bulletin tackles the issue of growing demand for high denomination banknotes in Australia, Canada and the United Kingdom.
Viktoria Dijakovic

The Reserve Bank of Australia’s (RBA) March 2018 Bulletin tries to understand growing demand for high-denomination banknotes in Australia, Canada and the United Kingdom. Indeed, demand for these countries’ currencies has been growing overall, but have reached a 50-year peak for the highest denominations: the AUD 100, CAD 100 and the GBP 50.

RBA’s research tackles various hypotheses including the correlation between financial uncertainty and the hoarding of cash, overseas demand for foreign currency as well as the effect of government and central bank policies on withdrawals of high denominations.

There are indeed other variables that could come into play such as the grey economy. Nevertheless, given the limited data on the subject, it was not be taken into consideration in the report.

The study found that demand for high-denominations is greatly linked to three major points:

To read the full RBA March 2018 Bulletin, please click here.

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