The Cash and Custody Division of the New York Federal Reserve reported on the decrease in currency inventories nationwide as a result of the COVID-19 pandemic, detailed the Puerto Rico Association of Banks.The entity said in a written communication that this decrease is mainly due to the interruption of the circulation of currency and the reduction in the production of coins by the US Mint (authority issuing the currency of the United States) due to the measures of Protection put in place for your employees. In turn, currency orders by depository institutions to the Federal Reserve have been on the rise after commercial reopens, all of which has resulted in the Reserve’s inventory of currencies being temporarily reduced.
The deficiency of coins (25 ¢, 10 ¢, 5 ¢, 1 ¢) is locally reflected, as the banking industry in Puerto Rico relies heavily on the inventory and supply of coins from the New York Federal Reserve. Banks in the United States and Puerto Rico are experiencing a reduction in currency supplies by the Federal Reserve, which will last several weeks, the Association said. This, due to a measure implemented by the Reserve that assigns proportional limits on the distribution of coins to depository institutions, to ensure an equitable distribution of the inventory of existing coins. This measure does not apply to the different denominations of the dollar (banknotes). “It is important to clarify that this is a temporary national situation that is beyond the control of local banks and businesses in Puerto Rico. We are aware that there is a high circulation of currencies on the Island. Commercial banks are working on strategies to mitigate this situation, “said Zoimé Álvarez Rubio, executive vice president of ABPR.
ABPR and its member banks urge citizens to make use of electronic means of payment to the extent possible. Also, it recommends that if you are going to make a cash payment, try to do it with exact change or with coins to help the recirculation of coins through the shops. “We emphasize that this is not a situation caused by businesses, and that banks are evaluating all the alternatives to support and satisfy the needs of their commercial customers, for the duration of the situation. We will continue to closely monitor this situation, and maintain constant communication with the New York Federal Reserve regarding its evolution, ”added Álvarez.The Federal Reserve is working on several fronts to mitigate the effects of low currency inventories. This includes managing the allocation of existing Fed inventories, working with the US Mint to minimize restrictions on the supply of coins, maximizing the capacity to produce coins, and calling on depository institutions to order only the coins they need to supply customer demand in the short term. The Federal Reserve is working closely with the Reserve Banks and the US Mint and is already starting to see a recirculation of currencies as the economy continues to reopen.