Canadians’ fiscal prudence might be helping them weather the worst effects of the COVID-19 pandemic so far, but it has also led to a shortage of $50 bills, according to the central bank.
Earlier this week, the Bank of Canada said that demand for $20 and $50 bills was significantly greater in April and May than at any other time in the past five years.
The BoC said in its report that the spike was driven by consumers and banks that shored up their financial reserves during the pandemic. Combined with federal financial assistance and mortgage payment deferrals, the added cash helped many Canadians remain largely liquid.
The central bank said that over April and May, around 35% of consumers reduced their cash usage, while each Canadian held an average of $22 more cash compared to the same time last year.
As a result, banks would need to adjust by using other denominations more frequently, CTV News reported.
“We still have $50 bank notes in stock, but the order adjustments were made in order to maintain adequate inventories throughout the next few weeks,” the BoC said. “This adjustment is due to the larger-than-expected demand over the past few months, and ahead of our regularly scheduled stock replenishment expected by the end of summer. This measure, which only affects the $50 denomination, is temporary and will be lifted as soon as possible.”