“effects of the financial crisis on currency demand” 3 rd international conference moscow,...
TRANSCRIPT
“Effects of the Financial Crisis on Currency Demand”3rd International Conference
Moscow, RussiaNovember 17-18, 2009
Michael J. Lambert
Assistant Director
Board of Governors of the Federal Reserve System
2
Outline
• General Trends in Currency in Circulation
• General Economic Indicators
• Changes in Demand for U.S. Currency
• Current Conditions
• Conclusion
Currency in Circulation:Value and Percent Change
1960 - 2008
3Source: Board of Governors H.4.1 Report
2008: 7.7%
Number of Banknotes in Circulation:1960 - 2008
4Source: U.S. Treasury Currency and Coin Report
Value of Currency in Circulation: Growth Rate Comparison
5* Data through August 2008
General Economic Indicators: Gross Domestic Product
6Source: Bureau of Economic Analysis
General Economic Indicators: Prime Interest Rate
7Source: Board of Governors
General Economic Indicators: Unemployment Rate
8Source: Bureau of Labor Statistics
General Economic Indicators: Personal Saving Rate
9Source: Bureau of Economic Analysis
General Economic Indicators: Consumer Confidence
10Source: Survey Research Center: University of Michigan
Value of Currency in Circulation:2004 - 2009
11Source: Board of Governors H.4.1 Report
Dec. 2004:$720
Value of Currency in Circulation:2005 - 2009
12Source: Board of Governors H.4.1 Report
Banknotes in Circulation: Type of Use
13Source: U.S. Treasury Currency and Coin Report
Value of Currency in Circulation:Transactional Denominations
14Source: U.S. Treasury Currency and Coin Report
Value of Currency in Circulation:Store of Value Denominations
15Source: U.S. Treasury Currency and Coin Report
Currency in Circulation:Value by Week 2005 - 2009
16
Payments to Circulation:2005 - 2009
17Source: Federal Reserve System National Cash Data Warehouse
Net Payments to Circulation:2006 - 2009
18Source: Federal Reserve System National Cash Data Warehouse
Domestic Vault Cash
19
BEP $100 Note Production
20
Value of Currency in Circulation: Growth Rate Comparison
21* Data through September 2009
0.8% Growth through August 2008
Conclusions
• Currency in circulation continues to grow.– Moderation began in the 2000s.
• Economic and political uncertainties continue to drive demand.– Recent financial instability indicates the broad effect
of the global crisis and the demand for $100 notes.
• Electronic payments likely having effect on growth rates.– Debit card growth exceeds the decline in
check usage.22