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With the partial closure of the economy due to the coronavirus
crisis, "the flow of coins through the economy has kind of
stopped," Federal Reserve Chair Jerome Powell told the House
Financial Services Committee.
Making matters worse, the U.S. Mint has decreased production of
coin due to measures put in place to protect its employees.
"We are working with the Mint and the Reserve Banks and as the
economy reopens we are seeing coins beginning to move around
again," Powell said. He made the remarks in response to a
question from Tennessee Congressman John Rose, who said a bank
in his district told him it would run out of coins by the end of
the week because the Fed was only sending a portion of its usual
order of coins.
"We all don't want to wake up to headlines in the near future
such as 'Banks run out of money,'" he said. Banks "don't know
what to tell their customers."
Powell said he was well aware of the issue and believed it would
be temporary. "We feel like we are making progress," Powell
said.
The Fed on Monday told
https://www.frbservices.org/
resources/financial-services/cash/strategic-allocation.html
banks it is working with the Mint to increase supply, but that
until the shortage can be cured would limit the number of
pennies, nickels, dimes and quarters it sends to them "to ensure
a fair and equitable distribution of coin inventory."
Allocations will be based on banks' historical patterns of coin
orders, it said.
(Reporting by Ann Saphir; Editing by David Gregorio)
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