Introduction to Currency Issuance
The amount of currency issued is affected by seasonal factors, general economic conditions, and institutional factors. Within a year, the most significant seasonal factor is the Chinese Lunar New Year. Around that time there is a temporary surge in cash demand, resulting in huge amount of currency issued. Normally a prosperous year results in greater transaction demand, hence greater demand for cash. And a hike in bank rate may lower the currency demand as people are more inclined to deposit their money in banks to earn higher interest. As for the long term, payment system development, such as the widespread deployment of ATMs, and the increasing adoption of internet banking services as well as some mobile payment devices, will also affect the amount of currency issued.
As the demand for currency is subject to a variety of factors, the Bank closely monitors changes. As such, demands and plans are created in advance accordingly to meet the public's needs.