(CNN) — The facial masks were the first to be depleted. Then, the toilet paper disappeared from the shelves. And while americans are facing the costs associated with the coronavirus in a shaky economy, the latest national shortage includes, well, cents.
Yes, now the coins are in short supply in the united States.
“What has happened is that, with the partial closing of the economy, the flow of coins through the economy has become… almost stopped”, explained the president of the Federal Reserve system, Jerome Powell, during a hearing virtual the Committee on Financial Services of the House of Representatives this Wednesday.
This is due to the supply chain and the general flow of the coins has been interrupted during the pandemic, he added Powell.
Banks and businesses have closed or changed the way in which they operate. And so, there are less coins coming to the public.
“The places that you’re going to change your coins, get in-store credit and have cash –you know tickets– have not worked. The shops have been closed,” he said. “So the whole system has stopped.”
During the hearing on Wednesday, representative John Rose of Tennessee, told Powell that the Federal Reserve notified the banks of his district, which only receive a small portion of his order weekly for coins. The banks told him that probably they would be left without coins at the end of the week or that they would have to round up or down if you run out, said Rose.
“In a time in which the cents are the difference between profitability and loss, it seems that it could be a greater concern than the announcement from the Federal Reserve would indicate that yes,” he added.
What are you doing?
To mitigate the shortage of coins, the Federal Reserve Banks began this week, the “strategic allocation of inventories of coins”, with the goal to distribute coins evenly between banks and credit unions. These measures of “strategic allocation”, which include the imposition of limits to orders based on the volume history of orders of these coins and how many coins currently produced by the mint of the united States.
Meanwhile, the Federal Reserve worked with the mint to produce more coins and remove the supply constraints. The Fed encourages institutions to ask for only the amount of coins needed to satisfy the demand of the customers in the short term.
“Although the Federal Reserve is confident that the problems of the inventory of coins will be resolved once the economy opens more widely and the supply chain of coins return to normal patterns of movement, we recognize that these measures alone will not be sufficient to resolve short-term problems,” the statement said of the Federal Reserve Banks.
Officials of the Fed believe that the shortage is temporary, ” said Powell.
“To the extent that it reopens the economy, we are seeing that the coins start to move again,” he said.