A One-Time Boost for Cash Volumes in Australia

Australia is often touted as one of the countries moving the fastest to becoming a cashless society. Whilst longer-term projections and data on payment habits support that view, recent figures from the Reserve Bank of Australia (RBA) and the Royal Australian Mint (RAM) indicate the opposite over the last year, albeit the (hopefully) one-off consequence of COVID.

The RBA, its recently published annual report, stated that the pandemic continued to affect banknote demand throughout 2020/21. Demand for $50 and $100 banknotes remained strong in the second half of 2020, suggesting their use as precautionary holdings, but abated over the first half of 2021. The demand for lower-value banknotes remained subdued, consistent with the ongoing decline in the use of cash as a means of payment.