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Cash withdrawals up markedly during epidemic

Ljubljana, 22 June (STA) - Cash withdrawals, in particular directly at banks, increased substantially at the outset of the epidemic and remain above pre-crisis levels, Banka Slovenije said on Monday. The central bank highlighted the 12-25 March period, when figures approached the record highs seen after the 2008 implosion of Lehman Brothers.

"When the epidemic was declared in Slovenia, demand for cash increased strongly much like in other European countries, the purpose being using money as a conservator of value," Banka Slovenije said in report published on Monday.

Between 12 and 25 March, the daily average of net cash issued - meaning cash put into circulation minus cash deposited - amounted to EUR 13.14 million, which made for a total of EUR 183.97 million.

"This is the second highest daily increase of net cash issued after that following the collapse of Lehman Brothers in October 2008, when the daily figure was EUR 16.60 million. Last year the average daily net figure was EUR 4.12 million," Banka Slovenije wrote.

The net cash issued also remained at a high level in April and May, standing at an average of EUR 8.31 million between mid-March and the end of May for a total of EUR 673 million. "A trend of a decrease to pre-crisis levels has not been noticed yet."

The average value of ATM withdrawals increased from EUR 117.41 before the crisis to EUR 152.78 in the period between 9 March and the end of May, but this was also because people decided to reduce the number of individual withdrawals, the central bank noted.

Indeed, the average weekly value of ATM withdrawals decreased from EUR 117 million to EUR 103.4 million in this period, which shows the marked increase in total cash withdrawn was mostly due to withdrawals executed directly at banks.

Meanwhile, card transactions increased drastically on 12 and 13 March to then fall noticeably, which Banka Slovenije also ascribed to people stocking up before the lockdown was declared.

The average value of transaction before the lockdown was 31 euro and later increased to 35 euro as people made longer breaks between shopping days. The number and value of card transaction started increase steadily as lockdown restrictions began to be eased at the end of April, "which shows the volume of card operations is returning to pre-epidemic levels".

While noting a strong increase in the demand for online purchases during the crisis, the central bank pointed out payment method habits were also affected by fear of transmission trough infected surfaces, which includes payment terminal buttons. Although Banka Slovenije backed the idea to increase the threshold value for PIN entries from 25 to 50 euros during the epidemic, no consensus on this was reached.

The report moreover points to a study on the risks of transmission through cash payments carried out by the European Central Bank in cooperation with several European labs.

The study showed the use of euro banknotes does not increase the risk level, as the virus is much likely to survive on surfaces made from stainless steel, such as door handles, than on cotton banknotes. What is more, transmission is much less likely with porous cotton surfaces than with smooth ones, for instance those made of plastic.

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