Page 91 - Special Topic Session (STS) - Volume 4

STS566 Richard Finlay
that this share is in decline. Although each estimation method is imperfect, we
take comfort from the fact that a number of different methods yield a broadly
similar trend.

4.2 Non-transactional banknote demand: the residual
While we presented the banknote life, banknote processing and
seasonality estimates above as indirect estimates of transactional cash
demand, they can equally be seen as indirect estimates of non-transactional
demand. These methods suggested that 20–40 per cent of outstanding
banknotes by value were used to facilitate transactions, implying that 60–80
per cent by value are used for non-transactional purposes.

References
1. Finlay R, A Staib and M Wakefield (2018), ‘Where’s the money? An
investigation into the whereabouts and uses of Australian banknotes’,
RBA Research Discussion Paper 2018 12.
2. Wakefield M and R Finlay (2018), ‘Understanding Demand for Australia's
Banknotes’, RBA Bulletin, December.

Graph 1 Graph 2

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