The importance of cash in a time of crisis.

We live in a world of profound uncertainty. So while it is not altogether impossible to forecast things within acceptable bounds of accuracy in an environment of almost predictable cycles and seasons, what about in periods of crisis? Recent times have seen a plethora of natural disasters, each requiring a major humanitarian effort to help those affected. Earthquakes, hurricanes, major floods, all natural disasters that disrupt infrastructure and services. At such times, people need vital access to essential supplies and vendors may be reluctant if not unable to accept debit/credit cards or other online payment systems. "In such cases, cash offers residents a way to purchase items to meet their urgent needs. It also gives local businesses a way to recover from the impact of the disaster" (Ron Delnevo, executive director, Europe, at the ATM Industry Association).


After two major earthquakes struck Christchurch, New Zealand in 2010 and 2011, there was a large and sudden spike in the demand for cash. Demand for necessities including water, food and fuel shot up. Electronic retail payment systems were not working and within a couple of hours commercial banks were ordering additional cash from the central bank. RBNZ reported an increase in demand for cash (all denominations) right across the country in the periods following these quakes.


Using case studies from disaster struck areas around the world such as Haiti and the Philippines, the Organization for Economic Cooperation and Development (OECD) has reported a new policy momentum for putting cash at the heart of humanitarian response. It has declared that, in the right context, cash can be more effective, efficient, and cheaper than in-kind aid, while benefiting the local economy. It also supports harmonization between relief efforts and longer term recovery.


                        Photo courtesy of


The World Bank recently stated that 80% of the world’s largest cities are vulnerable to severe earthquakes & flooding.

While cash remains our most universal, most trusted and fastest form of payment and provides much needed security in times of crisis, it is incumbent upon central banks throughout the world to plan for a sudden surge in demand for cash following a disaster and to avail themselves of the best available tools and expertise in doing so. 


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