Cash demand soars in Puerto Rico after hurricane hit ATMs, card systems

NEW YORK/SAN JUAN, Puerto Rico, Sept 27 (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.

SEE ALSO: Trump orders shipping restrictions lifted for storm-hit Puerto Rico

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, armored 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.

20 PHOTOS
Hurricane Maria's destruction in Puerto Rico
See Gallery
Hurricane Maria's destruction in Puerto Rico
COROZAL, PUERTO RICO - SEPTEMBER 27: Irma Maldanado stands with Sussury her parrot and her dog in what is left of her home that was destroyed when Hurricane Maria passed through on September 27, 2017 in Corozal, Puerto Rico. Puerto Rico experienced widespread damage including most of the electrical, gas and water grid as well as agriculture after Hurricane Maria, a category 4 hurricane, passed through. (Photo by Joe Raedle/Getty Images)
A car is viewed stuck in a flooded street in Santurce, in San Juan, Puerto Rico, on September 21, 2017. Puerto Rico braced for potentially calamitous flash flooding on Thursday after being pummeled by Hurricane Maria which devastated the island and knocked out the entire electricity grid. The hurricane, which Puerto Rico Governor Ricardo Rossello called 'the most devastating storm in a century,' had battered the island of 3.4 million people after roaring ashore early Wednesday with deadly winds and heavy rain. / AFP PHOTO / HECTOR RETAMAL (Photo credit should read HECTOR RETAMAL/AFP/Getty Images)
SAN JUAN, PUERTO RICO SEPTEMBER 20: Fishing boats with severe damage at Club Nautico in the San Juan Bay. Hurricane Maria passed through Puerto Rico leaving behind a path of destruction across the national territory. San Juan September 20, 2017. (Photo by Dennis M. Rivera Pichardo for The Washington Post via Getty Images)
SAN JUAN, PUERTO RICO SEPTEMBER 20: Hurricane Maria passed through Puerto Rico leaving behind a path of destruction across the national territory. San Juan September 20, 2017. (Photo by Dennis M. Rivera Pichardo for The Washington Post via Getty Images)
SAN JUAN, PUERTO RICO SEPTEMBER 20: Trees block the streets after Hurricane Maria at Escambron Beach in San Juan, Puerto Rico on September 20, 2017. (Photo by Pablo Pantoja/Anadolu Agency/Getty Images)
Men walk past damaged homes after the passage of Hurricane Maria, in San Juan, Puerto Rico, on September 20, 2017. Maria slammed into Puerto Rico on, cutting power on most of the US territory as terrified residents hunkered down in the face of the island's worst storm in living memory. After leaving a deadly trail of destruction on a string of smaller Caribbean islands, Maria made landfall on Puerto Rico's southeast coast around daybreak, packing winds of around 150mph (240kph). / AFP PHOTO / Hector RETAMAL (Photo credit should read HECTOR RETAMAL/AFP/Getty Images)
SAN JUAN, PUERTO RICO SEPTEMBER 20: Trees block the streets after Hurricane Maria at Escambron Beach in San Juan, Puerto Rico on September 20, 2017. (Photo by Pablo Pantoja/Anadolu Agency/Getty Images)
SAN JUAN, PUERTO RICO SEPTEMBER 20: A local shop sustained damages after Hurricane Maria at Ponce de Leon Street in San Juan, Puerto Rico on September 20, 2017. (Photo by Pablo Pantoja/Anadolu Agency/Getty Images)
A man looks for valuables in the damaged house of a relative after the area was hit by Hurricane Maria in Guayama, Puerto Rico September 20, 2017. REUTERS/Carlos Garcia Rawlins TPX IMAGES OF THE DAY
SAN JUAN, PUERTO RICO SEPTEMBER 20: Trees block the streets after Hurricane Maria at Escambron Beach in San Juan, Puerto Rico on September 20, 2017. (Photo by Pablo Pantoja/Anadolu Agency/Getty Images)
Damaged electrical installations are seen after the area was hit by Hurricane Maria en Guayama, Puerto Rico September 20, 2017. REUTERS/Carlos Garcia Rawlins
A man walks close to damaged houses after the area was hit by Hurricane Maria in Guayama, Puerto Rico September 20, 2017. REUTERS/Carlos Garcia Rawlins
Agapito Lopez looks at the damage in his house after the area was hit by Hurricane Maria in Guayama, Puerto Rico September 20, 2017. REUTERS/Carlos Garcia Rawlins
TOPSHOT - A man rides his bicycle through a damaged road in Toa Alta, west of San Juan, Puerto Rico, on September 24, 2017 following the passage of Hurricane Maria. Authorities in Puerto Rico rushed on September 23, 2017 to evacuate people living downriver from a dam said to be in danger of collapsing because of flooding from Hurricane Maria. / AFP PHOTO / Ricardo ARDUENGO (Photo credit should read RICARDO ARDUENGO/AFP/Getty Images)
SAN JUAN, PUERTO RICO - SEPTEMBER 25: People sit in their apartment after the window was blown out by the winds of Hurricane Maria as it passed through the area on September 25, 2017 in San Juan Puerto Rico. Maria left widespread damage across Puerto Rico, with virtually the whole island without power or cell service. (Photo by Joe Raedle/Getty Images)
SAN JUAN, PUERTO RICO - SEPTEMBER 25: A flooded street is seen as people deal with the aftermath of Hurricane Maria on September 25, 2017 in San Juan Puerto Rico. Maria left widespread damage across Puerto Rico, with virtually the whole island without power or cell service. (Photo by Joe Raedle/Getty Images)
SAN JUAN, PUERTO RICO - SEPTEMBER 25: People sit in their apartment with the window blown out by the winds of Hurricane Maria as it passed through the area last week on September 25, 2017 in San Juan Puerto Rico. Maria left widespread damage across Puerto Rico, with virtually the whole island without power or cell service. (Photo by Joe Raedle/Getty Images)
SAN JUAN, PUERTO RICO - SEPTEMBER 25: A flooded street is seen as people deal with the aftermath of Hurricane Maria on September 25, 2017 in San Juan Puerto Rico. Maria left widespread damage across Puerto Rico, with virtually the whole island without power or cell service. (Photo by Joe Raedle/Getty Images)
An aerial photo shows damage caused by Hurricane Maria in San Juan, Puerto Rico, September 27, 2017. Picture taken September 27, 2017. REUTERS/DroneBase
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

"OUT OF OPTIONS"

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 armored 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."

(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)

Read Full Story

Can't get enough personal finance tips?

Sign up for Finance Report by AOL and get everything from consumer news to money tricks delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.