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    What happened to the volume and value of cash in circulation?

    Dr Simon Jones, Head of Data Analytics, De La Rue Currency

    The way that we used cash during the early peaks of the COVID pandemic saw an abrupt change. There was an acceleration toward the digitalisation of payment methods whilst simultaneously the demand for cash grew. At first glance this increase in demand for competing payment methods may seem paradoxical, why would there be more demand for cash when we are paying for goods and services using cashless alternatives? 


    We looked at how cash volumes and the value of cash in circulation changed and identified some patterns using publicly available data from seventy-six central bank annual reports, statistical bulletins and data from online data warehouses.


    Between 2019 and 2020 the volume of banknotes in circulation increased by 7.7% or 40.5 billion notes from 523 billion to 563.5 billion. 
    During COVID demand for cash increased, everywhere. The image below shows how the global increase in cash volumes between 2019 exceeded the compound annual growth rate (CAGR) of the previous years, 2014 – 2019.  
    In economies considered to be ‘low-cash’ (Europe, Oceania (predominantly Australia), North America and Latin America demand was strongest, with each of the named economies seeing double-digit increases in volume. The surge in demand was less pronounced in more ‘cash prevalent’ economies within Africa and Asia, seeing only a 7.9% and 5.9% increase in cash volumes respectively during the pandemic.
    Cash map
    box plot cash volume change by regional spread
    Each dot displayed in the box plot represents an individual central bank. There are outliers in each region except for North America. For each region, the median provides mid-point where 50% of central banks record rates of increase above this point and 50% fall below. The range of variability demonstrates the change that happened in 2020 was predominantly caused by the increase of demand of cash during the pandemic.
    The boxplot summarises the rate the volume of the banknotes increased for each central bank with the region.


    Most countries provide the IMF with International Financial Statistics (IFS). The value of currency in circulation is one of these many statistics. The value of currency from one country is not directly comparable to another country therefore a useful measurement is to define the value of currency at a date to be an index of 1 and then measure the growth from that time.

    The impact across volume and value has been defined, nevertheless greater insight can be established on the affect within the denominational structure of banknotes in circulation. This analysis will focus on the top 8 most tradeable currencies which are: US Dollar, European Euro, Japanese Yen, British Pound, Swiss Franc, Canadian Dollar, Australian Dollar & South African Rand. (Figure 4)
    The values represent the volume increase per denomination for 2020 and a comparison to the CAGR between 2015 and 2019.

    Value of cash in circulation in 2020

    • India's demonetisation in 2016 significantly impacted the value of cash in circulation, along with the bounce back to expected values soon after. 
    • Sweden and Norway continued their move toward a "less-cash" society. 
    • Ghana saw the most rapid increase in the demand for currency in 2020 (Figure 3).  However, the more recent depreciation has likely been caused by an increased demand for foreign currencies as most businesses are now recovering from the COVID-19 shock. This is not limited to Ghana.
    • China and Japan are countries which were least impacted by COVID-19 with respect to currency in circulation. China experienced an increase at the beginning of 2020 yet returned to the original trajectory within a few months.
    • In Europe, Poland, Romania and the European Central Bank have experienced increased demand for value of currency in circulation and this should be expected to continue following the recent events in the Ukraine.
    • The Middle East shows substantial volatility in the value of currency across the region.

    Impact across denominations

    Denominational impact
    • The US Dollar denominations increased significantly for the 20 & 50, followed by the 10 and 100 denominations over the previously observed rate.
    •  The European Euro volume increased significantly, peaking with the 200. (This denomination is also impacted as a direct result of removing the 500 from circulation.) 
    •  The Japanese Yen continues to grow in the 10,000 Yen, which now represents 93% of value in circulation. The lower denominations saw a decrease in the volume in circulation. The increase of the 10,000 was only 5%.
    •  The Swiss Franc observed an increase over 10% for the 200 Franc.
    •  The Canadian Dollar observed a significant increase in the 50 and 100 Dollar.
    •  Similarly, the Australian Dollar has seen significant increases in the 50 and 100. The lowest denominations have decreased in the volume in circulation.
    •  There were no increases over 10% in South Africa, although the 100 and 200 Rand had increased above the previous observed rate.

    Volume and Value increase by currency

    V&V chart

    What happened next...

    In most countries, the volumes and value of currency in circulation were impacted by the pandemic and many witnessed increases significantly greater than previous recent historic growth rates. Mid to high value denominations were impacted the most during 2020. 
    These banknotes are likely to be used as a store of value and are often practical banknote denomination value for use within the market. The Bank for International Settlements reported that the demand for high-value denominations, increased further, and more strongly than for other notes and coins. 
    We are currently collating the statistics for 2021 as Annual Reports and Statistical Bulletins are being published.
    For central banks interested in 2021 data, please reach out to the DLR ANALYTICS™ team for more information.