Marshall Islands Correspondent
MAJURO, Marshall Islands — The Marshall Islands remains one of the few nations globally without a confirmed case of the Covid-19 coronavirus. While it has so far avoided health problems associated with Covid-19, the islands are being hit by the action to effectively isolate itself from the global pandemic.
U.S. currency has developed into a major issue for the country — both the dwindling supply and quality of the cash. In normal times, a Guam-based courier service delivers a supply of cash in the millions of dollars to the two banks in the Marshall Islands on a monthly basis.
Today, Majuro is operating with cash that has not been renewed in more than two months because deliveries of cash from Guam have halted, both because of lack of air service and rules banning incoming travelers or person-to-person contact between flight crews and local ground staff at the airport. Existing rules require the courier to hand off cash to bank authorities at either Bank of Guam or Bank of Marshall Islands — an impossibility when no one can get off the now-occasional international flights.
Authorities are attempting to work out an arrangement so cash can be delivered on the one United Airlines Island Hopper flight to Majuro for the month of May, now scheduled for May 20. In the meantime, cash issues are multiplying.
Indications since late April suggest less cash is being deposited by local businesses.
Bank of Guam Vice President and Majuro Branch Manager Jackey Salomon said in a message to local businesses in March that, as long as local companies continue depositing their cash intake as usual, then the risk of running out of cash was minimal. But he also warned against businesses “hoarding” cash in the present travel ban environment where obtaining replenishment of cash from Guam is a challenge.
Salomon issued another update and an appeal to local merchants at the end of April. He thanked local businesses for their continued support for Bank of Guam and Bank of Marshall Islands by “continuing with your daily or weekly cash deposits to ensure normalcy in our banking sector.”
“Both Federated States of Micronesia and Marshall Islands were not able to receive their cash,” Salomon said of the hoped-for delivery in April. “The two Marshall Islands banks need the cooperation of all merchants,” he said, adding the cooperation is needed to “ensure the two bank’s ability to stay open, operate and support the daily transaction request by our community and customers.”
Usually the bank sees a large infusion of cash deposits from businesses on the Monday after a holiday weekend. But after the Easter holiday weekend, “We saw a reduction of 50 percent of what we normally receive with an increase in checks deposited,” said Salomon. “That translates to stores keeping the cash and cashing checks themselves.”
Bank of Marshall Islands has resorted to limiting cash withdrawals, while some local businesses have reduced the amount of cash they will provide for cashing customer’s paychecks.
“We are continuing to encourage customers to use debit cards for both banks and to write checks to save the use of cash,” he said. “We are also encouraging those merchants who do not have direct deposit to consider paying employees by checks, especially for those companies that insist on paying their employees by cash, such as the fishing companies.”
More fallout from the use of old U.S. currency surfaced the first week of May. Majuro is operating with green paper that has not been renewed in more than two months, so the same bills have been re-circulating in the economy for months.
“As predicted, mutilated and worn cash has brought down our ATMs,” Bank of Guam Branch Manager Jackey Salomon told local businesspeople on May 4. Old cash knocked out two of the three ATMs operated by Bank of Guam in Majuro. The bank was attempting repairs. While these two are out of service, the only ATM working is in Payless Supermarket. “Until we get clean cash, the ATMs will be in this situation,” he said.
The cash shortage has proved to be an opportunity for Bank of Marshall Islands. Although the local bank launched a debit card service for the first time late last year, it has seen use of the cards multiply during the Covid-19 pandemic period.
Through the end of April, Bank of Marshall Islands has issued 4,435 debit cards to bank account customers. It has also installed debit card machines in 69 stores on Majuro and 19 on Ebeye Island, the second urban center in the Marshall Islands. More business installations are in the pipeline pending access to Internet services at various locations. mbj