US Dollar Production Reverts to Pre-Pandemic Norms

The production of US banknotes for 2023 will likely be below that of the previous two years, according to the 2023 Federal Reserve order for currency published in early November.

Similar to the prior two years and unlike those from before then, the print order includes ranges of notes by denomination instead of specific totals. The production order for FY 2023 contains a range of 4.5-8.6 billion notes, valued at $166.5-190.5 billion.

The Federal Reserve order for FY 2022 was from 6.9-9.7 billion notes and that for FY 2021 from 7.5-9.6 billion notes.

Most of the banknotes produced for 2023 will be $1s and $100s, as in prior years. $20s barely appear in the newest order. The order also lacks $2 notes for the first time in three years.

The lower volume range for the 2023 print order ranges reflects a return to pre-pandemic levels, says the Fed. While in the last two years, higher volumes were required to meet higher demand, for 2023 most banknotes will be produced to replace those taken out of circulation or because they are older designs, marking a return to historic norms.

To put the demand into context, currency in circulation (CIC), a direct measure of demand for Federal Reserve notes, increased by 1.2 billion notes between June 2021 and June 2022. In contrast, during the same period the previous year, it increased by 4 billion notes, when cash demand was heavily affected by the pandemic. Year-over-year, CIC continues to increase, says the Fed, though the rate at which it is increasing has returned to pre-pandemic levels.

The Fed also states that the FY 2023 print order demonstrates a shared commitment between the Board and BEP to allocate the latter’s production capacity to essential projects supporting the US Currency Program’s strategic priorities, some of which were deferred during the pandemic.

These include producing a new banknote series with the signatures of the new Treasurer and Secretary, remediating deferred equipment maintenance, completing equipment upgrades, making note production process improvements, installing and validating new equipment, and transitioning additional denominations to larger sheets to improve efficiency.

They also include the allocation of resources to meet the 2026 issue date for the Catalyst $10, the first in the next series, which will go into production in 2025.

The Fed approved a currency operating budget of $1.06 billion for 2022, up $110.8 million, or 11.7%, from 2021 forecasted expenses of $949.2 million. A currency budget for 2023 is yet to be published.

Federal Reserve print orders 2010-2023. 

Coin Production Continues to Top One Billion

Separately, according to the latest October figures from the US Mint, coin production has surpassed 1 billion coins for the second month in a row. The Mint struck just over 1.177 billion coins for circulation, an increase of 17.3% from September figures, although a decline of 3% from the same time last year.

Total year to date figures currently stand at just under 11.868 billion coins, a reduction of 4.6% through the same period last year. The highest produced denomination remains the 1 cent coin, albeit the October figures are a new low for production, representing 38.9% of circulating coins produced compared to last month’s figure of 42.4%.