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31 March 2021 Supervision
Een vrouw koopt iets met contant geld bij een kraam

Since the start of the pandemic, DNB has processed far fewer banknotes than usual. The intake of banknotes has in fact decreased so much that, for the first time since 2002, DNB is issuing more banknotes than it is receiving (Figure 1). 

Possible explanations for this include the stagnation of tourism, the closure of stores and cash hoarding. Whether the familiar pattern of an annual negative net issuance will return depends very much on the recovery following the pandemic.

Figure 1

Figure 1 – In 2020, DNB issued more banknotes than it received

Reduced international tourism leads to less inflow of banknotes

Tourist and business traffic to the Netherlands usually results in a net inflow of euro banknotes. As a result of the pandemic, however, the number of foreign tourists in 2020 decreased by 65%. Consequently, the inflow of banknotes has also largely stagnated.

Less cash withdrawn for POS purchases

In 2020, consumers withdrew less cash and also used less of the cash they withdrew for point-of-sale (POS) purchases. Although the average withdrawal amount increased by 23 euros, the total withdrawal amount in 2020 was 27% lower than in 2019. Still, the receipts of cash from retailers and the return flows from these retailers to banks decreased even more. The total value of cash deposited mainly by retailers was 34% lower in 2020 than in 2019.

Possibly more cash hoarded

This “hoarding” of euro banknotes occurred throughout the euro area (and beyond) during the pandemic, and led to a large increase in net issuance. In the Netherlands, cash was mainly hoarded for reasons related to the coronavirus crisis, which left many unwilling or unable to spend cash.