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Cash demand spikes during coronavirus crisis

Apr 14, 2020

During any crisis, cash demand goes up - and the COVID-19 pandemic is no exception. Even with fake news on how coronavirus spreads leading to cash bans, it turns out that people want to use cash now, more than ever.

Europeans are using as much cash as they would before Christmas, says the ECB, as uncertainty over when lockdown measures will be lifted inspire mass shopping sprees.

"One rule of thumb still holds true in the euro-area. When everything seems to be going to hell in a handcart, people just want to hold cash."
"Lorcan Roche KellyBloomberg (Mar 24, 2020)

From Bloomberg (March 24th, 2020):

"The amount of cash circulating in the euro area increased last week by the most since October 2008, in the latest sign that the coronavirus pandemic has sparked the biggest economic crunch at least since the global financial crisis.

Cash jumped by almost 19 billion euros ($20 billion), according to European Central Bank data. The ECB’s total balance sheet expanded by 223 billion euros as massive liquidity injections added to assets.

“The demand for banknotes in that week was similar to the demand in the week before Christmas.”
"ECB spokesperson

With consumers in the euro-area ramping up spending as they try to stockpile goods ahead of coronavirus shutdowns, demand for notes and coins has spiked."

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Between December 31, 2019 and April 30, 2020, Mexico saw an unprecedented spike in cash demand. The central bank credited this to the public taking precautions in light of the pandemic.

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Last Updated: Jan 17, 2024

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