Update on the Global Demand for Banknotes

Currency News™ began to publish global annual updates on banknote demand in 2017. The first years provided no major surprises. Normally, a few currencies (less than 10%) had a negative annual growth rate by value of banknotes in circulation and similarly a few currencies (again less than 10%) had a high annual growth rate of more than 25%. The growth rates of the great majority of currencies varied between 0% and 15%, and their distributions were nicely shaped, tending towards a normal distribution. All this changed in 2020, and since then the situation hasn’t stabilised.

In 2020 more than 75% of the currencies had a double-digit growth rate, which exceeded 25% in the case of more than 22% of the currencies. It was evident that this exceptional development related to the outbreak of the COVID-19 pandemic would be later counteracted. That didn’t happen in 2021.

However, the pandemic disrupted global supply chains and inflated food and energy prices, which were further accelerated by the geopolitical tensions created by the Russian attack on Ukraine. Global inflation, which during the period 2013−2020 was less than 4% per year, grew to 4.7% in 2021 and jumped to 8.3% in 2022 ¹. To suppress inflation, central banks began to raise interest rates. The measures increased the opportunity costs of cash balances and led gradually to their withdrawal.