NEW YORK/SAN JUAN, Puerto Rico (Reuters) - Demand for cash in hurricane-ravaged Puerto Rico is “extraordinarily high” after power outages knocked out electronic transactions and ATMs but needs were being met for now, a Federal Reserve branch said on Wednesday.
Residents and tourists were counting their dwindling banknotes in the wake of Hurricane Maria, which crippled the electrical grid and communications network, turning the Caribbean island into a largely cash-based economy.
The New York branch of the U.S. central bank, which oversees and makes funds available to Puerto Rico’s financial institutions, said it was prepared for another surge in cash demand and could rush more banknotes to the island if necessary.
ATMs are slowly re-opening a week after Maria, the most powerful hurricane to hit Puerto Rico in 90 years, caused widespread flooding and badly damaged homes, roads and other infrastructure on the island of 3.4 million.
The New York Fed’s cash distribution operations were working and it had adequate stocks to meet the needs of lenders and other firms on the U.S. territory, a spokeswoman told Reuters.
“Demand for cash is extraordinarily high right now, and will evolve as depository institutions regain power, armoured car services are able to reach branches, and ATMs are once again active,” the spokeswoman said.
“We are coordinating with local and national authorities to monitor the situation on the ground very closely, and are actively preparing to meet any sustained elevated currency demand in the future,” she added.
Cash is just one of the scarce resources on Puerto Rico, which faces shortages of fuel, water and medical supplies after Maria.
With electricity and internet down in Yauco, southwestern Puerto Rico, Nancy and Caesar Nieve said they could not access paychecks directly deposited into their bank accounts.
“What are we going to do when we don’t have any cash? The little cash we have, we have to save for gas,” said Nancy.
Cash demand spiked in the first few days after the hurricane as merchants were unable to accept other modes of payment.
First BanCorp, one of the island’s top banks, said around 28 of its 48 branches remained closed but electronic transactions were resuming and about 25 percent of its ATMs were back online as power and telecommunications were restored.
“The first couple of days were a cash economy. Now electronic transactions are going through,” First BanCorp Chief Executive Aurelio Aleman said in a telephone interview, adding that the bank had enough cash on hand.
The New York Fed boosted the island’s supply of banknotes before Maria arrived to meet a surge in demand. It ships cash directly from New York to a depot there from which private armoured vehicles make deliveries.
In the last month, Fed branches in Texas and Florida similarly stocked up on funds and ramped up deliveries in the face of hurricanes Harvey and Irma.
Isolation and widespread power outages, however, intensified the cash crunch in Puerto Rico.
“I’m out of options,” said Brandon Alexander Jones, a vacationer from London who on Tuesday was down to $85, with no way to get more cash, and no way to reach a friend on the island due to crippled cellular service.
He was staying in a San Juan shelter after a hobbled hotel had asked him and other guests to leave, and he spent much of his remaining money to get to the airport.
“I don’t know how to get across the Atlantic. I don’t know how to get to the States. I’m stranded,” he told Reuters. “I’m out of reach from anyone who can help me.”
For an interactive on Puerto Rico's worsening debt crisis, click: here
Reporting by Jonathan Spicer in New York and Robin Respaut in San Juan; Additional reporting by Saquib Ahmed in New York; editing by Frances Kerry