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OK, so person a deposits cash, person b in another country withdraws cash. Eventually bank location a will have an excess of cash and bank location b will have
by betwixthewires 5y ago
OK, so person a deposits cash, person b in another country withdraws cash. Eventually bank location a will have an excess of cash and bank location b will have a shortage of cash. How do you square that?
Now think about the fact that 25% of el Salvador's GDP is remittances from the US. Country wide, banks have a shortage of cash deposits every Friday. Bank location a will need to eventually ship that cash to bank location b, and maintain a channel to keep the money flowing.
It's not that simple, if it were that simple that's how banks would do it. There are logistics involved.