Circular of the People’s Bank of China on Ensuring Cash Supplies

to Meet Demand for the Spring Festival

(PBC Document No. [2008] 48)

It is now the peak season for cash issuance, however, there has been an snowstorm unprecedented in several decades，transports in many parts of China have been disrupted or blocked, bringing in a negative impact on the PBC’s cash supply. Therefore, the PBC Headquarters requires all branches at various levels to take prompt actions to ensure sufficient cash supply in the run-up of the upcoming Spring Festival.

First, all branches should attach great importance to cash supplies. The leaders of all branches should put it on top priority to ensure cash supplies. Efforts should be made to strengthen leadership in the work of cash supplies and take into account of all possible problems that may occur. All branches should formulate concrete plans, coordinate and solve the problems associated with cash supplies in a timely manner so as to ensure the smooth operation of cash supplies.

Second, all branches should be aware of the impact of snowing weather on the condition of local cash supplies in a timely manner. Snowing weather in some places has disrupted transportation and left many passengers stranded on the road, and may have influenced the orderliness of local cash distribution to varying extent. All branches should organize related departments to do researches on this, make thorough investigation into the issuance fund in their jurisdiction, and adjust the issuance funds in a timely manner between branches with a net cash issuance and branches with a net cash withdrawal from the banking sector, so as to ensure that cash supplies won’t be disrupted. If there is abnormal situation in cash supply in their jurisdictions, relevant branches should report to their supervisory branches level by level.

Third, all branches should make preparation for transporting issuance fund at any moment. Due to transportation reasons, the original issuance fund supply system may be subject to sudden change. The PBC Headquarter will coordinate and transport issuance fund to meet local cash demands. According to this Circular, all branches should make arrangements for personnel, vehicles, oil supplies, anti-skid devices associated with transporting issuance fund. Branches should acquaint themselves with local transportation situation in a timely manner, strengthen the check of telecommunication along the traffic lines, so as to ensure safe transportation of issuance fund.

Fourth, all branches should take a set of feasible measures to deal with emergencies. Affected by bad weather and transportations, the uncertainty of cash supplies in some places may increase. All branches should be fully aware of the situation, and according to the Contingent Plans for Cash Supply Related Emergencies promulgated by the PBC, all branches should formulate a set of feasible preventive measures according to local situations, so as to avoid negative impact on overall situation of a single emergent event.

Fifth, all branches should urge and help commercial banks solve problems associated with depositing and withdrawal of cash. Commercial banks have comparatively weak capabilities in handling cash transportation, and have relatively smaller cash vaults, thus may find it even more difficult to cope with cash supply emergencies. All PBC branches should urge commercial banks to appropriately increase their cash in vaults, prepare emergency measures for cash supplies in their business outlets so as to enhance their abilities to cope with abrupt events. In the meantime, all PBC branches should take proactive measures to help commercial banks solve their cash supply problems. For those commercial banks that cannot conduct cash depositing and withdrawal operation from their original PBC branches because of unfavorable weather and transportation condition, the related PBC branches should arrange these banks to deposit and withdraw cash in issuance vaults of other PBC branches in their vicinity.

Sixth, all branches should pay attention to cash supplies after the Spring Festival. Due to the bad weather, the work of cash issuance before the Spring Festival of 2008 may extend to post festival period. All branches should make preparation for cash issuance after the Spring Festival. In the meantime, coordination should be made to adjust the structure of the banknotes, so as to ensure the smooth cash issuance after the Spring Festival.

Seventh, all branches should pay close attention to, and communicate effectively with the media so as to guide the media to provide favorable coverage of cash supplies.

The General Administration Department of the PBC

January 30th, 2008    

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