Draft Currency Notes (Variation of Maximum Amount of Issue) (Jersey) Regulations 200-

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A decision made (18.09.2009) to approve the draft Currency Notes (Variation of Maximum Amount of Issue) (Jersey) Regulations 200-

Decision Reference: MD-TR-2009-0144
Decision Summary Title:	Increase in Jersey currency note issue limit to £100 million		Date of Decision Summary:	18 September 2009
Decision Summary Author:	Head of Shared Services		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Increase in Jersey currency note issue limit to £100 million		Date of Written Report:	18 September 2009
Written Report Author:	Head of Shared Services		Written Report : Public or Exempt?	Public
Subject: Increase in the Jersey currency notes issue limit to £100 million.
Decision(s): The Minister for Treasury and Resources approved the draft Currency Notes (Variation of Maximum Amount of Issue) (Jersey) Regulations 200-, the purpose of which was to increase the Jersey currency notes issue limit to £100 million, and requested that they be lodged ‘au Greffe’ for debate at the earliest opportunity.
Reason(s) for Decision: In order to meet the peak demand for currency by Islanders the maximum limit of currency in circulation, set at £75 million in 1999, needs to be increased approximately in line with inflation to £100 million.
Resource Implications: There are no changes to resource requirements.
Action required: The Greffier of the States to lodge the draft Regulations ‘au Greffe’ at the earliest opportunity.
Signature:		Position: Senator P F C Ozouf Minister for Treasury and Resources
Date Signed:		Date of Decision:

Draft Currency Notes (Variation of Maximum Amount of Issue) (Jersey) Regulations 200-

TREASURY & RESOURCES DEPARTMENT

INCREASE IN JERSEY CURRENCY NOTE

ISSUE LIMIT TO £100 MILLION

INTRODUCTION

Under Article 1 of the Currency Notes (Jersey) Law 1959, the Minister has the power to issue Currency Notes but requires States approval for the maximum amount that can be issued. The purpose of this report is to recommend an increase to the amount of currency in circulation from £75 million to £100 million.

BACKGROUND

The last increase in currency in circulation was in 1999 when the limit was increased from £50m to £75m. If the increase were index linked, in line with the inflation over the last 10 years, the limit would now be £110m.

The amount of Jersey Currency Notes in circulation is governed entirely by the demands of the retail banks, which in turn is driven by the cash demands of their customers. As the Treasury issues Currency Notes only to the retail banks it exercises only minimal control over movements in currency in circulation. In addition, unlike the UK, Jersey has a fully backed currency, with every pound in circulation being matched with a one pound investment.

Throughout the year, the amount of currency in circulation is approximately £70m; however, demand rises steeply for a few weeks during the Christmas period. During the Christmas period last year (2008) demand briefly exceeded the issue limit. Accordingly, an increase in the ceiling is necessary to keep pace with inflation and to cover islanders’ cash requirements during the festive period.

RECOMMENDATIONS

It is recommended that the Treasury and Resources Minister seek the approval of the States to increase, by Regulations, the maximum value of currency notes in circulation to £100 million.

Stuart Lusby

Shared Services

18th September 2009