By Will Johnson
EAST TEXAS – The COVID-19 pandemic has affected many areas of ordinary life. It caused the schools in Texas to close. It caused shortages of meat and of toilet paper. It forced professional sporting teams to suspend or cancel their seasons.
The list goes on and on. There is one thing, however, most people didn’t see coming down the pike and that’s a change shortage. Pennies, nickels, dimes and quarters are now in high demand thanks in large part to the Coronavirus.
According to a June 11 press release from the Federal Reserve, “The COVID‐19 pandemic has significantly disrupted the supply chain and normal circulation patterns for U.S. coin. 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. Federal Reserve coin orders from depository institutions have begun to increase as regions reopen, resulting in the Federal Reserve’s coin inventory being reduced to below normal levels. While the U.S. Mint is the issuing authority for coin, the Federal Reserve manages coin inventory and its distribution to depository institutions (including commercial banks, community banks, credit unions and thrifts) through Reserve Bank cash operations and offsite locations across the country operated by Federal Reserve vendors.
“The Federal Reserve is working on several fronts to mitigate the effects of low coin inventories,” the media statement continued. “This includes managing the allocation of existing Fed inventories, working with the Mint, as issuing authority, to minimize coin supply constraints and maximize coin production capacity, and encouraging depository institutions to order only the coin they need to meet near‐term customer demand. Depository institutions also can help replenish inventories by removing barriers to consumer deposits of loose and rolled coins. Although the Federal Reserve is confident that the coin inventory issues will resolve once the economy opens more broadly and the coin supply chain returns to normal circulation patterns, we recognize that these measures alone will not be enough to resolve near‐term issues.”
During a virtual hearing with the House Financial Services Committee, Federal Reserve chairman Jerome Powell said, “What’s happened is that, with the partial closure of the economy, the flow of coins through the economy has gotten all — it’s kind of stopped.”
With the new surge in COVID-19 cases, we might not see the coin inventory be restored for some time.
Will Johnson may be contacted via e-mail at email@example.com.