Critics might fret that the recent slowdown in the growth in Japan's monetary base (banks' reserves at the central bank plus notes and coins in circulation) suggests that the Bank of Japan has tightened policy.
His policy of expanding "power money"--cash in circulation plus bank reserves--will feed inflation, which is currently at 5.2%.
And if central bankers sought to control money, however defined, by targeting the monetary base cash in circulation and commercial-bank reserves held with the central bank they lost control of the short-term interest rate, which might move erratically and damage the economy.
In May, a new five-euro note will be put into circulation by the European Central Bank.
The Reserve Banks will run the newly deposited cash through highly sophisticated automated machines that count it, detect counterfeits, and destroy bank notes deemed unfit for re-circulation.
Aiming to cut the levels of yuan in circulation, the People's Bank of China is increasing the banking reserve ratio by half a percentage point to 13.5%.
The unfit notes are destroyed and the notes deemed fit for re-circulation are added back into Reserve Bank inventories to be paid out to banks in filling future orders.
Under a currency board arrangement, the central bank guarantees the redemption of all notes in circulation at a set exchange rate to the dollar or another foreign currency or basket of currencies.
That is what it is now doing: Japan's monetary base (currency in circulation and banks' reserves at the Bank of Japan) grew by 23% in the year to January.
To compensate, the bank sells its own bills, thus taking yuan out of circulation.
IR The Argentine Central Bank has, at least, one dollar in its reserves for every peso in circulation.
The First National Bank of Fairfield and Iowa State Bank keep reserves of the Maharishi's dollars on hand to cover raams in circulation.
Our earlier use of this policy approach had little effect on the amount of currency in circulation or on other broad measures of the money supply, such as bank deposits.
The Bank of England issues nearly a billion banknotes each year, and withdraws almost as many from circulation.
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