Tag Archives: Cash

On his blog, JP Koning reports that [b]oth the Christmas bump and the sawtooth pattern arising from monthly payrolls are less noticeable than previous years. But these patterns remain more apparent for Canadian dollars than U.S. dollars. Not because Canadians like cash more than Americans. We don’t, and are probably further along the path towards digital payments then they are. Rather, the percentage of U.S. dollars held overseas is much larger than Canadian dollars, so domestic usage of...

On his blog, JP Koning reports that [b]oth the Christmas bump and the sawtooth pattern arising from monthly payrolls are less noticeable than previous years. But these patterns remain more apparent for Canadian dollars than U.S. dollars. Not because Canadians like cash more than Americans. We don’t, and are probably further along the path towards digital payments then they are. Rather, the percentage of U.S. dollars held overseas is much larger than Canadian dollars, so domestic usage of...

In the FAZ, Philip Plickert reports that Deutsche Bundesbank changed its terms of business. Starting August 25, the Bundesbank may refuse cash transactions with a bank if the Bundesbank fears that, counter to the bank’s assurances, the cash transaction might help the bank or its customers evade sanctions or restrictions with the aim to impede money laundering or terrorism finance. Conveniently, this will allow the Bundesbank to reject a request by European-Iranian Handelsbank to withdraw...

In the FAZ, Philip Plickert reports that Deutsche Bundesbank changed its terms of business. Starting August 25, the Bundesbank may refuse cash transactions with a bank if the Bundesbank fears that, counter to the bank’s assurances, the cash transaction might help the bank or its customers evade sanctions or restrictions with the aim to impede money laundering or terrorism finance. Conveniently, this will allow the Bundesbank to reject a request by European-Iranian Handelsbank to withdraw...

Kontantupproret (“cash rebellion”) in Sweden—not everybody is pleased with the prospect of a cashless society. David Crouch reports in The Guardian.

On VoxEU, Clemens Jobst and Helmut Stix argue that … cash balances for transactions comprise only a modest share of overall cash demand (a rough estimate of 15% might be a good guess across richer economies). … changes in currency in circulation are dominated by motives like hoarding. While transaction demand is reasonably well researched … still too little is known about non-transaction demand in general, and recent increases in particular.

On his blog, JP Koning offers two explanations for the surprisingly high rupee notes redemption rate—nearly 99%—after last year’s demonetization experiment: Money laundering, and a partial amnesty. Indians who had large quantities of illicit cash were able to contract with those who had room below their ceiling to convert illicit rupees on their behalf … Two weeks after the initial … announcement, the government introduced a formal amnesty for demonetized banknote holders. Any deposit of...

In the FT, Sam Fleming and Demetri Sevastopulo report that the White House considers Marvin Goodfriend for the Federal Reserve’s Board of Governors. He has criticised the Fed’s crisis-era balance sheet expansion, saying the central bank should generally not purchase mortgage-backed securities, and has advocated the use of monetary policy rules to guide policy, as has Mr Quarles. … At the same time, however, Mr Goodfriend has been willing to contemplate the use of deeply negative rates to...

On his blog, JP Koning provides an account of recent monetary policy in Zimbabwe: The country dollarized in 2008. The central bank offered USD deposit accounts for banks, specifically for inter bank payments. But these accounts were not fully backed by USDs, or the central bank rationed access to USDs for other reasons (early 2016). Banks got squeezed, bank customers started a run, and the government imposed withdrawal limits. Retailers started to charge higher prices for “plastic money”...

On his blog, JP Koning discusses the case of Somalia which has managed without central bank issued money for decades. Old, legitimate notes and newer, counterfeit notes trade at the same price which equals the cost of producing counterfeits. See also this previous post.