A Global Update on Cash Demand in Turbulent Times: Part I

Currency News™ has published annual updates on the banknote developments at the global level since September 2017.

Because of the exceptional situation created by the COVID-19 pandemic, being simultaneously mirrored in the decreasing transactional and increasing precautionary demand for cash, the update was published last year in two parts. The first part focused on the development of the banknote circulation in value terms in 2020, comparing it with the past ¹ and the second part, when more information was available also on the denominational demand, shed further light on the store of value function of cash during the pandemic ².

The hope that this year’s update would illustrate some kind of return to a new normal in cash demand has proved to be unrealistic. Not only have the lockdowns during the pandemic disrupted global supply chains, but the shocking Russian invasion of Ukraine has recently created further uncertainty. Even if the war has hit hardest on the Ukrainian people and infrastructure, its impacts have been felt across the world, besides creating a strong reaction, it has brought about galloping inflation of food and energy prices.