BUDAPEST, Jan. 28 (Xinhua) -- The amount of cash in circulation reached 6,117 billion forints (22 billion U.S. dollars) at the end of 2018, up 18.7 percent compared to that at the end of 2017, local media reported on Monday, citing figures released by the Hungarian Central Bank MNB.
The year-on-year increase of 18.7 percent is much higher than the 12.2 percent registered at the end of 2017 and the 17.1 percent at the peak of recent years.
Cash in circulation has been steadily growing in Hungary since 2009. The previous record of 17.1 percent had been registered at the end of 2014.
According to data from the European Central Bank, Hungary had the second highest cash-to-GDP ratio in the EU, behind only Bulgaria.
The rapid rise in cash in circulation can be partly explained by falling deposit interest rates and yields between 2012 and 2017, a weak incentive to keep savings in bank accounts or in other savings instruments rather than cash.
Another reason of the high cash ratio in the Hungarian society is the black economy, in which transactions are made in cash to avoid taxation.
The Hungarian government has introduced several measures to decrease the ratio of cash payments, such as the promotion of credit and debit card readers in small shops or the abolishment of transaction fees on bank transfers.
