September 27, 2017 / 6:40 PM / 20 days ago

UPDATE 1-Cash demand 'extraordinarily high' in hurricane-hit Puerto Rico -Fed

NEW YORK, Sept 27 (Reuters) - Demand for cash in storm-ravaged Puerto Rico is “extraordinarily high” as power outages strain banks but needs are being met for now, a U.S. central bank branch said on Wednesday, adding that it was ready to rush banknotes to the island if necessary.

The Federal Reserve Bank of New York’s cash operations in Puerto Rico are working and it has adequate stocks of banknotes to meet the needs of depositary institutions on the U.S. territory, a spokeswoman for the bank told Reuters.

“Demand for cash is extraordinarily high right now, and will evolve as depository institutions regain power, armored car services are able to reach branches, and ATMs are once again active,” said the spokeswoman for the New York Fed.

Powerful Hurricane Maria swiped the island of 3.4 million people a week ago, causing widespread flooding, cutting electricity to the entire island and badly damaging homes and infrastructure.

“‎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,” the bank spokeswoman added.

The New York Fed, which supervises and meets the funding needs of financial institutions on Puerto Rico, shipped supplies of banknotes to the island before Maria arrived, to ensure its banks could meet demand before and after the storm passed.

The Fed does not have a branch on the island and ships cash directly from New York to a depot there from which private armored vehicles make deliveries.

In the last month, Fed branches in Texas and Florida similarly stocked up on cash ahead of hurricanes Harvey and Irma, and ramped up deliveries to meet surges in demand. (Reporting by Jonathan Spicer; Writing by Andrew Hay; Editing by Frances Kerry)

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