FedCash Services: 2020 Holiday Currency Ordering Periods Suspended
August 26, 2020
The Federal Reserve will suspend the holiday currency ordering periods in 2020 as a proactive measure to reduce the operational strain on Reserve Bank cash employees during the winter holiday season in these unprecedented times. Reserve Banks also have paid out high amounts of new currency over the past few months, substantially increasing the number of new notes received by depository institutions; this is a contributing factor in the decision to suspend the special holiday ordering periods. The Federal Reserve Banks continue to have sufficient currency reserves on hand to meet the needs of depository institutions.
Reserve Banks are focusing on meeting daily demand for currency and coin during the COVID-19 pandemic
While Reserve Banks have traditionally provided holiday currency ordering periods on an annual basis, the practice places an additional operational strain on Reserve Bank cash offices. The suspension of the holiday currency ordering periods this year will enable Reserve Banks to continue focusing on their core mission of meeting daily demand for currency and coin.
Reserve Banks continue to pay out large amounts of new currency
Throughout the COVID-19 pandemic, demand for currency remains significantly higher than in more normal times, and Reserve Banks continue to pay out higher amounts of currency. Over the course of the last few months, Reserve Banks supplemented large portions of currency payouts with new notes to meet this demand. As a result, depository institutions received high volumes of new notes in all denominations, and most institutions consistently received new notes for months. The significant increase in new notes paid out into the market contributed to the decision to suspend the holiday currency order.
Background on holiday currency ordering
In order to operate efficiently and to minimize printing costs for new currency, Federal Reserve Banks fill orders for currency with fit notes first and then with newly printed notes. In advance of the winter holiday season, the Federal Reserve offers two separate periods, each lasting a week, during which depository institutions can place special orders for new currency, in addition to their regular orders for currency, which are filled with fit notes. The Reserve Banks offer these special ordering periods because the amount of new notes depository institutions receive in their orders throughout the year is typically small. As the supply chain returns to normal, we will reassess the holiday currency ordering periods at the beginning of 2021 and communicate any changes.
For questions related to this change, please contact your local cash services department.
If you know of others in your organization that should be notified of these types of operational changes, please forward this email.