Coins part of latest shortage caused by COVID-19
Break out your piggy banks, the latest COVID-19 shortage involves pocket change.
The coronavirus pandemic has caused a nationwide coin shortage, according to the Federal Reserve.
Reserve Chair Jerome Powell said Wednesday the shutdowns caused by the pandemic have raised concerns about circulation of coins, which the Fed’s 12 regional banks are in charge of supplying to commercial banks.
“With the partial closure of the economy, the flow of funds through the economy has stopped,” Powell said during a virtual hearing with the House Financial Services Committee. “We are working with the Mint and the Reserve Banks and as the economy re-opens we are starting to see money move around again.”
Reserve Banks and Federal Reserve coin distribution locations began temporarily allocating coin inventories to banks across the nation June 15, the Reserve said in a statement.
“The COVID-19 pandemic has significantly disrupted the supply chain and normal circulation patterns for U.S. coin,” the statement said. “In the past few months, coin deposits from depository institutions to the Federal Reserve have declined significantly and the U.S. Mint’s production of coin also decreased due to measures put in place to protect its employees.”
Since March, many businesses and experts have encouraged consumers to use contactless payment systems because of concerns about the spread of the viral infection on cash and credit cards.
COVID-19 and panic buying caused various shortages, including hand sanitizer, toilet paper, disinfecting wipes, meat and yeast.
While Powell addressed the circulation of coin, the Fed is more closely associated with other financial issues, such as its recent commitment to buy huge amounts of individual corporate bonds as part of its previously announced program to keep lending markets running smoothly and allowing big employers access to cash.
Powell also asked Congress to continue its relief efforts during the pandemic.
The aid approved by the federal government has amounted to trillions of dollars.
Contributing: Associated Press