How does the Federal Reserve Board determine how much currency to order each year?
As the issuer of Federal Reserve notes, the Federal Reserve Board places an order for currency from the U.S. Treasury Department's Bureau of Engraving and Printing every year. The print order is broken out by denomination. We decide how much of each denomination to order based on
- how much demand we expect
- how much currency we expect that Reserve Banks will destroy because the notes are unfit to circulate, and
- other factors, such as inventory management or the issuance of a new design
We use the majority of new notes printed each year to replace unfit notes that Reserve Banks have removed from circulation. For example, we estimate that in 2015, 85 percent of the new notes printed will replace destroyed currency, while the remaining 15 percent will meet increased public demand.