When a new currency is created, how does it move from the central bank into circulation among people?

Asked Aug 12, 2018· 1 answer ·India
Faisal KhanAnswered Aug 12, 2018

When a central bank creates new currency, it is sold off to the commercial (high-street) banks, a process known as seigniorage.

The commercial banks then distribute this money via their cash management division through all the channels they have, predominantly, ATMs and Over-the-Counter.

If the new currency in replacing old currency, then customers usually queue up at banks and exchange their old currency for the new one (happened in India very recently).

Central BanksBanking EconomicsCentral Bank Policy India
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