Cash is king in COVID as RBA data reveals an extra $14.6bn in new notes in 2020

Despite calls for people to pay with cards, new cash is flowing freely, new RBA data shows.

More than $1.1bn of the $50 notes were issued in December alone, the RBA reports.

Cash is king, even during COVID, with new numbers out on Tuesday revealing total banknotes in circulation rose by $1.6bn in December.

The final count leaves almost $98.6bn in cash circulating the nation’s economy.

The end-of-year cash surge comes amid a full-year bill-printing bonanza from the Reserve Bank of Australia, with total currency in circulation exploding by 17.4 per cent for the year

Since last December, the Australian economy has seen an extra $14.6bn added to the economy.

This is almost an extra $584.2 per Australian.

This cash explosion far outstripped the long-run average growth of a 5 per cent growth in currency in circulation.

The polymer surge comes despite many shunning bills in favour of card, after warnings were sounded early in the pandemic of cash’s viral transmission potential.

CommSec economist Craig James said many of the new notes were being hoarded and never seeing circulation.

“It’s similar to how people like to hoard toilet paper,” he said.

“It’s making sure that people do have cash on hand in emergencies and also it’s a concern about the future and making sure they do have some assets close by just in case there’s some sort of disaster.”

The $100 note is very popular even if it is not often used in exchange.

The humble $50 remains the note of choice for Australian’s everywhere, outnumbering the more ostentatious $100.

More than $1.1bn of the $50 notes were issued in December alone, boosting its circulation by 2.3 per cent in just one month.

The $50 note saw its fastest growth since 2008 in the year that was 2020, ending the year with 23.8 per cent more in circulation.

But the $100 note was also a winner in 2020, with notes in circulation growing by $346.2m in December.

That is despite many people never seeing a $100 bill in the wild.

This followed a bumper year for growth of the notes, which reached 29-year highs in October at 15.8 per cent.

This has since slackened off to close the year up 13.6 per cent

The Reserve Bank issued its new $100 bills in October, as part of a general security update of the Australian currency.

The bumper cash crop comes after several years of declining or stagnant ATM withdrawal.

ANZ went so far as to sell off its 1300 non-bank ATMs to Armaguard in August 2020.