During the pandemic, Poles did not trust banks. They massively withdraw cash from ATMs. In March and April, more than PLN 46 billion was in circulation.
A record jump in cash that is in circulation
The latest data from the Pekao bank shows that in April alone the value of cash in circulation was PLN 272.8 billion. It is PLN 20.2 billion more than a month ago. In March, the increase amounted to PLN 26.3 billion. Nominally, it was the biggest jump in history.
In the age of pandemics, cash is king. While epidemiological considerations should encourage non-cash payments, the value of cash in circulation increased by nearly PLN 50 billion over two months. Concerns about physical access to savings should gradually subside in the coming months. pic.twitter.com/HvIHWnFm2t
– Analyzes Pekao (@Pekao_Analizy) May 25, 2020
In March 2020, cash in circulation was in turn by 21.3 percent. more than a year ago. In April, 29.4 percent This is the highest result in the history of this type of data. This goes back to 1998, the period when card and online payments were not so popular – to put it mildly.
What is the reason for this? After all, theoretically, in a pandemic era, Poles should want to pay for purchases via cards and via the network, so as not to become infected with coronavirus. It was different. Maybe the reason was fake news that could be found on the Internet that suggested that the banknotes and coins are already missing from the banks? Or was it something else? The fear of bank failures has returned, as we remember from 2008?
“Apparently Poles have been withdrawing cash en masse for fear of disturbing electronic payments”
– say economists from Santander Bank Polska.
“It can also be added that in April Poles simply had fewer opportunities to spend cash (which would turn into corporate deposits), and besides a functioning gray area in sectors covered by the freeze (e.g. hairdressing services) required the use of physically existing money.
At the same time, the NBP data show that in April households were withdrawing money from deposits (-12.4 billion PLN, -11.3% y / y). This is probably due to the worse interest rate offer, resulting from interest rate cuts by the Monetary Policy Council. Part of the funds withdrawn from deposits could be used to purchase treasury bonds, which sold record high in April. “
– adds Michał Żuławiński on the portal bankier.pl.