Fed says currency supply sufficient for Y2K rollover

The Federal Reserve Board announced Aug. 13 it has ordered 9 billion currency notes, with a face value of $67 billion, for fiscal year 2000.

The order, sent to the Treasury Department's Bureau of Engraving and Printing, represents a return to historical ordering patterns.

Last year, the board ordered eleven billion notes worth $267 billion to meet normal business needs and to prepare for the possibility of increased demand around the Year 2000 rollover, according to a press release from the Federal Reserve Board.

The face value of the new order is considerably smaller than the previous year because the board decided not to print additional $50 and $100 notes. The inventory of larger notes is sufficient to meet anticipated demand over the next federal fiscal year, which begins Oct. 1.

In last year's order, the board aimed for an increase in inventory because, even though it expects the full variety of payment options to work during the rollover, it wants the public to have confidence in the availability of cash.

"Because of increasing confidence in the readiness of the financial infrastructure, we do not anticipate extraordinary demand for cash. Nevertheless, we have taken all the appropriate steps to make sure it is available if the public wants it," said the Fed's Gov. Edward W. Kelley Jr.

While currency inventory levels depend on flows into and out of reserve banks from the nation's depository institutions, and on the destruction rate of worn-out bills, the board expects by year-end to have well in excess of $200 billion in reserve bank vaults. That's more than enough to replace all of the approximately $170 billion in currency circulating in the United States.

The board expects inventory levels to decrease gradually next year as replacement currency enters circulation and the Bureau of Engraving and Printing delivers fewer notes.