MICHAEL J LAMBERTDEPUTY ASSOCIATE DIRECTOR

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

“Trends in U.S. Currency in Circulation”

5th International ConferenceMoscow, RussiaApril 19-20, 2012

2

Outline

• General Trends in Currency in Circulation• Economic Crises and Changes in

Demand • Post Crises and Trends in Currency in

Circulation• Current Situation• Conclusions

Currency in Circulation:Value and Percent Change

1960 - 2011

$0

$200,000,000,000

$400,000,000,000

$600,000,000,000

$800,000,000,000

$1,000,000,000,000

$1,200,000,000,000

-10%

-5%

0%

5%

10%

15%

20%

25%

Annual G

rowth

2011 $1,034

2011 9.8%

Value of Currency in Circulation: Growth Rate Comparison

(by decade)

4

1960s

1970s

1980s

1990s

2000s

0% 2% 4% 6% 8% 10% 12%

5.3%

9.4%

7.9%

7.7%

5.3%

Value of Currency in Circulation: Annual Growth Rate

5

2001-022002-032003-042004-052005-062006-072007-082008-092009-102010-11

0% 2% 4% 6% 8% 10% 12%

6.9%

5.4%

4.3%

5.4%

3.2%

1.1%

7.7%

4.1%

6.0%

9.8%

0.8% Growth through August 2008

6

Value of Currency in Circulation: 2006 - 2012

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec$700

$750

$800

$850

$900

$950

$1,000

$1,050

$1,100

2012201120102009

Month

$ (B

illio

ns)

Dec$944

Dec$890Dec$853

Dec$792

Dec$783

Dec$1,035

Apr 11, 2012$1,060

7

Currency in Circulation: Transactional vs. Store of Value Denominations

(in value)

Jan-0

6

Jun-0

6

Nov-06

Apr-07

Sep-07

Feb-08

Jul-0

8

Dec-08

May-09

Oct-09

Mar-10

Aug-10

Jan-1

1

Jun-1

1

Nov-11

0

50

100

150

200

250

300

300

400

500

600

700

800

900

Transactional (Left Axis) Store of Value (Right Axis)

$ (B

illio

ns) $ (B

illions)

8

Value of Currency in Circulation:Transactional Denominations

9

Currency in Circulation:Transactional vs. Store of Value

Denominations (Billions of Pieces)

Jan-0

6

May-06

Sep-06

Jan-0

7

May-07

Sep-07

Jan-0

8

May-08

Sep-08

Jan-0

9

May-09

Sep-09

Jan-1

0

May-10

Sep-10

Jan-1

1

May-11

Sep-11

Jan-1

215

17

19

21

23

25

5

6

7

8

9

10

Transactional (Left Axis) Store of Value (Right Axis)

10

Value of Currency in Circulation:Store of Value Denominations

11

Monthly $100 Note Activity:International vs. Domestic

Jan 2

006

May 20

06

Sep 20

06

Jan 2

007

May 20

07

Sep 20

07

Jan 2

008

May 20

08

Sep 20

08

Jan 2

009

May 20

09

Sep 20

09

Jan 2

010

May 20

10

Sep 20

10

Jan 2

011

May 20

11

Sep 20

11

Jan 2

012

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Domestic Payments Domestic ReceiptsInternational Payments International Receipts

12

Annual $100 Note Activity: International

13

International $100 Note Activity: 2007 Net Exporters and Importers

2007 Simple Net

Net ExporterNet Importer

14

International $100 Note Activity: 2011 Net Exporters and Importers

2011 Simple Net

Net ExporterNet Importer

15

Distribution of International Payments – 2007 and 2011

22%

13%

29%

12%

21%

3%

AmericasAsiaEuropeMENARussiaSSA

14%

17%

31%

8%

25%

6%

2007 2011

16

Distribution of International Receipts – 2007 and 2011

2007 2011

22%

30%

10%

21%

17%

1%

20%

37%19%

18%

5%

2%

AmericasAsiaEuropeMENARussia/CISSSA

17

Conclusions

• Currency in circulation continues to grow.– Annual incremental value increases remain strong.

• Economic and political uncertainties continue to drive demand.– Global financial instability is latest example of return

to $100 note as store of value during uncertain times.– International order and deposit patterns have

changed following the financial crisis.• New markets have contributed to overall growth

increases.