Reserve Bank Governor Philip Lowe has admitted he doesn’t know where Australia’s $100 banknotes are all going.
The circulation of Australia’s highest denomination polymer note had been growing at seven per cent a year on average, during the past decade, only for that to abruptly stop.
‘So it’s hard to know where they all are but the growth in the number of hundred dollar bills in circulation has stopped, which is unusual,’ Dr Lowe told the National Press Club in Sydney.
The RBA chief suggested bank savings rates of 4.5 per cent meant Australians had less incentive to keep physical banknotes at home.
‘The incentive for holding one hundred dollar bills at home under your bed is less, so that’s been a change,’ he said.
‘Whether it persists is hard to tell.’
Reserve Bank Governor Philip Lowe has admitted he doesn’t know where Australia’s $100 banknotes are all going
Note Printing Australia – a subsidiary of the RBA – in 2021-22 delivered 431million new-generation banknotes, including 156million $100 bills – making up more than a third of deliveries to the Reserve Bank.
The annual report for 2022 showed average, annual circulation growth of 7.4 per cent for $100 banknotes during the previous 10 years.
That was well above the 6.7 per cent average figure for all the denominations combined, which included 3.7 per cent growth for the $5 note, 3.2 per cent for the $10 bill, 2.5 per cent for the $20 note and 6.7 per cent for the $50 money.
Read Related Also: The Met’s hotline to report police for abuse received 700 calls after PC David Carrick rape scandal
‘On the $100 notes, you’re right there are rough 18 hundred dollar notes out there for every man, woman and child in the country,’ Dr Lowe said.
‘I don’t have my share, I don’t know many people who do.’
Before the Reserve Bank’s severe interest rate rises, the circulation of $100 banknotes was growing at an average, annual pace of 7.4 per cent
The Reserve Bank on Tuesday left interest rates on hold at an 11-year high of 3.6 per cent, marking the first pause since April 2022.
But this followed 10 consecutive monthly increases, which were the most severe since the era of the target cash rate began in 1990.
While the futures market is expecting rate cuts in late 2023, Dr Lowe said it was too soon to suggest an easing in monetary policy.
‘I do think it’s premature to be talking about interest rate cuts,’ he said.
Inflation in 2022 hit a 32-year high of 7.8 per cent but the monthly reading for February showed a moderation to 6.8 per cent.
The Reserve Bank is expecting inflation to remain above its two to three per cent target until mid-2025.
