China Disinfects Cash to Contain Spread of Coronavirus
While the Chinese government has confirmed that more than 1,800 people have died from the deadly coronavirus, the country’s central bank has rolled out a new strategy to contain its spread. Aside to offering 200 billion yuan ($29 billion) worth of one-year medium-term loans to banks, the People’s Bank of China (PBOC) will also be getting rid of notes collected by buses, markets and hospitals in coronavirus-afflicted areas. Alternatively, paper currency that is not disposed of must be disinfected.
The primary aim of the new measure looks to contain the spread of the deadly virus, officially known as Covid-19. Even as questions about the virus remain unanswered, it has now infected more than 70,000 people globally. The PBOC will make use of ultraviolet light or high temperatures to remove bacteria from bills and have the cash stored. Specifically, storage period ranges between seven to fourteen days, depending on the severity of the outbreak in a specific region, before placing it back into circulation.
More notably, cash that arises from high-risk infection areas such as hospitals will be treated with extra care. These bills will be sent back to the central bank rather than having it recirculated. Central banks around the world tend to destroy old notes to even out the supply with new cash. However, this practice does not affect the supply of money, even as coronavirus-related actions remain separate from regular measures.
Results from previous studies revealed that money can be extremely filthy. Each bill, passed from one individual to another, samples a bit of the environment it comes from, and passes on those bits to the next person. More specifically, a deputy chief at a large bank in Guangzhou has explicitly asked for customers to reveal where their deposited cash is from. However, the representative has also revealed the effectiveness of such a measure might be limited.
Following the lockdown announced in late January, pharmacies across the nation sold out of sanitisers and surgical masks. Additionally, office buildings have also installed tissue packets in elevators to encourage tenants to use tissues while pressing elevator buttons.
Deputy governor of PBOC, Fan Yifei has said that 600 billion yuan has been injected into the financial system since mid-January, with 4 billion dedicated to Wuhan, the city where the outbreak originated. Ms Fan has also revealed that the PBOC will pump in extra cash to financial institutions to assist firms in tiding through this challenging time. Even as Muhammad Munir, a virologist at Lancaster University questioned the effectiveness of decontaminating cash, Ms Fan added that the country would speed up its work in the field of electronic payments.
This is because mobile payments can prevent human contact through physical cash exchanges. As a result of trade hurdles, China’s economic growth has slowed in recent years. Yet, slowing global expansion has further weighed on gross domestic product. More notably, Goldman Sachs foresees the coronavirus to cut as much as 1.6 percentage points from its next-quarter growth.
By Caroline Wong
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