The mystery behind Australia’s ‘disappearing’ $100 bills – as Reserve Bank Governor Philip Lowe explains: ‘I don’t know where they all are’
- The Reserve Bank chief said “difficult to know” about $100 bills
- The strong annual circulation stopped as interest rates rose
Reserve Bank Governor Philip Lowe has admitted he doesn’t know where Australia’s $100 notes are going.
The circulation of Australia’s highest-denomination polymer banknote had grown at an average annual rate of seven per cent over the past ten years, but this came to an abrupt halt.
“So it’s hard to know where all of them are, but the growth in the number of hundred dollar bills in circulation has stopped, which is unusual,” Dr Lowe told the National Press Club in Sydney.
The RBA chief suggested that bank savings of 4.5 percent meant Australians were less likely to keep physical notes at home.
“The incentive to keep $100 bills under your bed at home is less, so that’s a change,” he said.
“Whether it will last is hard to say.”
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Reserve Bank Governor Philip Lowe has admitted he doesn’t know where Australia’s $100 notes are all going
Note Printing Australia – a subsidiary of the RBA – delivered 431 million new generation banknotes in 2021-2022, including 156 million $100 notes, representing more than a third of deliveries to the Reserve Bank.
The 2022 annual report showed an average annual circulation growth of 7.4 percent for $100 notes over the past 10 years.
That was well above the average figure of 6.7 percent for all denominations combined, including 3.7 percent growth for the $5 bill, 3.2 percent for the $10 bill, 2.5 percent for the $10 bill. 20 and 6.7 percent for the $50 money.
“On the $100 bills, you’re right, there are about 18 hundred dollar bills for every man, woman and child in the country,” Dr. Lowe said.
“I don’t have my share, I don’t know many people who do.”
Before the Reserve Bank’s sharp rate hikes, the circulation of $100 notes grew at an average annual rate of 7.4 percent
The Reserve Bank left interest rates unchanged on Tuesday at an 11-year high of 3.6 percent, the first break since April 2022.
But this followed 10 consecutive monthly increases, which were the most severe since the start of the spot rate era in 1990.
While the futures market expects interest rate cuts in late 2023, Dr Lowe said it was too early to suggest an easing of monetary policy.
“I think it’s premature to talk about rate cuts,” he said.
Inflation reached a 32-year high of 7.8 percent in 2022, but the monthly reading for February showed a moderation to 6.8 percent.
The Reserve Bank expects inflation to remain above its target of two to three percent until mid-2025.