According to De La Rue, a banknote maker, global demand for banknotes is at its lowest in 20 years.
According to the business, which manufactures one-third of the world’s banknotes, cash demand has fallen since the epidemic, when central banks stocked up on currency.
It stated that the slump would harm its full-year profitability, which was expected to fall short of projections.
Due to the company’s more difficult commercial circumstances, its credit agreements with its banks must be renegotiated.
Clive Vacher, the CEO, told the BBC that during Covid, central banks increased demand for banknotes, as they generally do during economic downturns. Nevertheless, they were postponing fresh orders because their supplies had run out.
This comes when cash usage is declining in many nations as more purchases are made online or with cards, particularly contactless payments.
De La Rue stated that there are indicators of improvement, but he has yet to determine when this will occur. As a result, de la Rue shares dropped as much as 30% on Wednesday before recovering some ground after the company presented its quarterly report.
Due to lower profitability and increased interest rates due to the Bank of England’s series of increases, the 200-year-old company said it was negotiating loan terms with its banks.
De La Rue anticipates full-year earnings in the “low £20 million range,” although loan interest payments have increased.
It said it is “discussing with its lending banks the prospect of amending its banking covenants to reflect the updated outlook and the rise in the company’s financing costs due to higher Bank of England base rates.”
De La Rue employs 1,800 employees in 140 countries worldwide.
All current Bank of England banknotes are produced in Debden, Essex.
The atmosphere inside the De La Rue currency printing factory is a strange blend of conventional and unusual.
The factory floor is typical of many manufacturing facilities, with high-tech machinery, pallet carriers, and personnel.
Yet, the “product,” as it is known, piques your attention. Millions of banknotes are at various stages of production. Evidently, security is really strict.
The everyday creation of so many banknotes contradicts our daily life, as many individuals pay for goods and services with cards and cell phones.
De La Rue is also creating new banknotes with images of King Charles, which will go into circulation mid-next year.
The company, based in Basingstoke, Hampshire, has contracts with central banks all around the world.
Some banks print money with it, while others manufacture polymer for banknotes and other services.
King Charles’ banknotes have been printed but not ready
Millions of new banknotes with King Charles’ visage are being created but will go into circulation mid-next year.
Journalists were granted unique access to the high-security facility where Bank of England notes are manufactured.
The only alteration to the existing designs of the £5, £10, £20, and £50 notes will be the King’s portrait, and new notes will replace damaged or worn-out older ones.
However, machines, such as self-service tills, must recognize the new image.
According to the Bank of England’s top cashier, the practice requires a large build-up. As a result, the notes will not be available until mid-2024, several months after the 50p pieces with the King’s portrait are released.
Sarah John, whose signature appears on the notes, said there is still considerable work to be done to ensure that machines around the country can accept the banknotes.
The back side of existing polymer banknotes will remain unchanged, depicting Sir Winston Churchill, Jane Austen, JMW Turner, and Alan Turing in ascending sequence.
Even after the new notes are introduced, the existing 4.7 billion Queen Elizabeth notes, worth £82 billion, will continue to be accepted in stores. They will be replaced only if King Charles’ notes become useless or demand increases.
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To reduce the environmental and economic impact of the transformation, the Royal Household has issued recommendations supporting such a shift rather than a total conversion.
Despite this, approximately six million new notes were printed in 24 hours on the day of the BBC’s visit to the production site – a facility surrounded by barbed wire resembling a prison.
They come in a “sausage” of 5,000 notes, each of which can pay off numerous mortgages but will instead be used in daily transactions across the UK economy. Yet, growing inflation has weakened the purchasing power of some banknotes.
Even though more banknotes are in circulation than ever before, consumers are using them less frequently. Nevertheless, cash use has declined significantly when compared to debit card use, owing mostly to the introduction of contactless payments.
The King’s Head in Chipping Ongar is the best place to satisfy your craving for the new Charles banknotes. The bar has historical significance because it was named after King James II, who is supposed to have stopped at a nearby coaching inn during his reign.
According to Deputy Manager Carol Mason, only a small percentage of clients pay with cash today and those who do tend to be older.
