Lack in Consumer Spending Results in Coin Shortage
Lack of spending and fear of physical tender due puts a halt on the circulation of coins as a result of the coronavirus pandemic
Graphic by Abraham Navarro/SAC.Media.
Shortages rage on with many stores around the country requesting exact change be used as they do not have any for the time being. The Federal Reserve website explains that, “Business and bank closures associated with the COVID-19 pandemic have significantly disrupted the supply chain and normal circulation patterns for U.S. coins. While there is an adequate overall amount of coins in the economy, the slowed pace of circulation has reduced available inventories in some areas of the country.”
Yahoo Finance reported that the U.S. Mint slowed its production after implementing safety guidelines that the production staff is required to follow. They also said that people are not using as many coins because they do not want to be handling cash and coins during the pandemic.
The Federal Reserve continues to say that they are working with the U.S. Mint to find solutions to the shortage. For now they have placed a cap amount allowed in all financial institutions across the nation to ensure coins are being distributed daily. The website also stated that, “ a U.S. Coin Task Force was formed to identify, implement, and promote actions to address disruptions to coin circulation.”
The Federal Reserve Bank website explained that, “the U.S. Coin Task Force will convene in early July with the goal of completing a first set of recommendations by the end of July. At the end of this first phase, the group will share its progress and evaluate the benefits of continuing the task force.”
“The Federal Reserve is working on many fronts with our industry partners, including the U.S. Mint, to minimize supply constraints and maximize coin production capacity,” said the website.
It is being encouraged for everyone to spend their coins or deposit them into coin banks to get them circulating again. The Federal Reserve Bank website encourages the use of the hashtag #getcoinmoving to spread awareness of the need for spending coins.
It is expected that with the reopening of the economy and businesses, that coins should begin to flow through which will solve the shortage.