Money disappears from Poles’ accounts. Experts have their theory

Data from the National Bank of Poland (NBP) show that by the end of August last year the value of cash in circulation reached a record level of PLN 443 billion. This is an increase of 7.4%. compared to the previous year. The phenomenon of “cash hoarding”, i.e. putting aside cash outside the banking system and storing it in physical form, is becoming more and more popular in Poland.

What is cash boarding?

As Business Insider Polska notes, “cash hoarding” is not a temporary trend. Last year, the value of cash in circulation increased by 9.5%. within 12 months.

Experts explain that cash is less and less used solely as a means of payment. For many Poles, it becomes a form of security in the event of a crisis (resulting, for example, from the geopolitical situation), problems with payment systems such as e-banking failures, as well as cyber attacks.

Forex Club data shows that less than two-thirds of Poles (66%) keep cash at home as security. However, these are not very large amounts, most often they reach a maximum of PLN 5,000. zloty.

The relatively low interest rates on deposits do not encourage people to keep money in the bank. The marathon of interest rate cuts that we saw last year resulted in a marathon of deposit cuts. Currently, only those who decide to make a monthly or half-yearly deposit can count on relatively high rates.

Many Poles prefer to keep money at home rather than in a bank for privacy reasons. Cash transactions are anonymous, unlike electronic payments.

Experts warn that the increase in the amount of cash in circulation may contribute to the development of the gray zone and hiding some transactions outside the official financial circulation.

Despite the growing popularity of keeping money at home, the central bank draws attention to the high availability of banking services. According to NBP data, as many as 98.65 percent Poles can freely use ATMs throughout the country.