Central Banks’ Hoarding of Notes during the millennium bug scare leads to lowest cash demand
The Bank of England’s only currency printer reports the lowest banknote demand since central banks hoarded cash over the millennium bug fears.
De La Rue, the British banknote maker, has reported the lowest demand for notes in over 20 years, citing hoarding by central banks during the millennium bug scare in 2000 and the ongoing COVID-19 pandemic as the main factors.
The fear of computer systems malfunctioning due to the turn of the millennium had led to stockpiling of cash by central banks, resulting in lower demand for notes in subsequent years.
Similarly, in times of uncertainty like the pandemic, banks, ATM operators, and post offices stockpile banknotes, while the use of cash drops along with discretionary spending.
As a result, De La Rue‘s order book for the 2024 financial year is low, and the outlook is uncertain. The company expects its full-year adjusted operating profits for 2023 to be around 5%, which is below market expectations.
