MALAYSIA’S currency in circulation (CIC) grew by 15.1% year-on-year to RM150.1 bil as of end-2021 from RM130.4 bil a year ago, the strongest annual growth in the last two decades.
Bank Negara Malaysia (BNM) said businesses and households preferred to hold extra cash in hand for precautionary reasons amid the prolonged COVID-19 pandemic, and similar trend was observed across many other countries globally.
“There was also sufficient availability of cash during the unexpected severe floods that affected several parts of the country at the end of 2021,” BNM said in its 2021 Annual Report released today.
Despite growing demand for cash, it said the share of coins in CIC fell from 5.1% in the pre-pandemic year of 2019 to 4.3% in 2021, whereby coins do not command the same status of banknotes as a store of value and a medium of exchange.
“Through various efforts, in particular deployment of coin deposit machines by financial institutions at selected branches, 60.4 million pieces of coins, equivalent to 7.6% of total coins issued in 2021, were recirculated,” it said.
To maintain a high quality of CIC, BNM said it shredded 24.6% of the total volume of banknotes processed, the highest rate in the last five years.
In prioritising the issuance of fit banknotes, it said 57% out of 2.72 billion pieces of banknotes issued in 2021 were fit banknotes as this is not only more cost-effective, but also reduces the carbon footprint given that banknote printing is both water- and energy-intensive.
Overall, the central bank said currency operations nationwide remained uninterrupted last year, despite challenges associated with the prolonged COVID-19 pandemic.
“The availability and accessibility of cash by businesses and households was sustained, whilst maintaining a high quality of CIC and comparatively low counterfeit rate,” it added. – March 30, 2022
