Australians Stockpile A$11 Billion in Cash as Economy Dips - RBA
(17 August 2020 – Australia) The Reserve Bank of Australia (RBA) has identified a ‘paradoxical’ surge in demand for cash taking place in response to the COVID-19 pandemic.
While many consumers move to debit and credit card transactions, the RBA has been forced to increase cash in circulation from A$83 billion to A$94 billion due to increased demand for bank notes.
The A$11 billion surge is even more significant when considering that the average consumer is shirking cash. Spending data shows an increasing dependence on card transactions, with cash withdrawals halving at the start of the pandemic.
“Some people seem to be wanting to keep some extra money at home. While COVID-19 has accelerated the shift to electronic payments, there has, paradoxically, also been record demand for banknotes” RBA Governor Philip Lowe stated.
“Some people seem to be wanting to keep some extra money at home. The result has been that the stock of banknotes on issue has increased and we have met this extra demand despite our main storage vault being located in one of the coronavirus hotspots in Melbourne. We do not yet have the GDP data for Q2, but it will show the biggest economic contraction in many decades, likely to be around seven percent. If there is any good news to be found here, it is that this decline is not as large as initially feared” Dr Lowe added.
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