EVANSVILLE, Ind. (WFIE) - If you have been holding onto a jar of pennies, now may be the time to cash it in.
The United States is seeing a national coin shortage because of the COVID-19 pandemic. You may have seen signs at chain restaurants or grocery stores asking for exact change. It’s not just out of convenience - it may be because they don’t have any change to give back to you.
“There is no conspiracy here,” says Matt Finn, chief economist at Old National bank. “It’s simply another effect of the coronavirus.”
According to Finn, there is about $48 billion of coinage in the United States. Right now, however, it may be hard to come by.
Finn says that’s because the U.S. Mint had slowed production of coins because of the coronavirus. Plus, fewer people have been using coins at places like vending machines, laundromats and car washes.
The coin circulation depends on those places regularly, depositing coins to the bank.
“The bank sends it to the federal reserve and redistributes it, based on need,” says Finn. “Well the problem is when people stop going to those places and people stop going to the bank - all that velocity of money, all that exchange of coinage slowed down.”
Finn compares this shortage to the toilet paper shortage we saw earlier this year. When people change their spending habits rather quickly, the system pays the price.
“What economists hope is that when the country opens up again and businesses get back to normal, the problem should fix itself,” says Finn. “But until that happens, it could get worse.”
Finn says the Federal Reserve has started a U.S. Coin Task Force to accelerate the circulation of coinage. When asked what individuals can do to help the circulation, Finn advises paying with exact change whenever you can.