The Monetary Authority of Singapore's Currency Department has replied to my feedback about the shortage of new currency notes for the Chinese Lunar New Year
In my posting just before the lunar New Year, I had written about the yearly shortage faced by many people and quoted a friend who asked why the Board of Commissioners of Currency could not have printed more new notes knowing that there was going to be a demand every year.
She said the giving of angpows "is a good family tradition that we would want to uphold and the government should play its part to make sure that there is sufficient supply of those notes every year."
Unfortunately, according to the MAS, it is not a simple case of just issuing new notes. It says it
will (only) issue new notes when recirculated notes are insufficient to meet the demand for cash.
"This usually coincides with festive periods such as Chinese New Year. The amount of new notes to be issued in any given year, depends on the demand from banks and stock level of recirculated notes," it explains.
This means that the ball at the feet of our banks. How much new notes are put out by the authorities depends on the banks.
In other words, the annual shortage occurs because the banks have under-estimated the demand from its customers.
The big question is: Why are the banks so conservative, some would say stupid, in their applications for new notes when they know full well that there is consistently a shortage every year?