The Reserve Bank will keep all cash coming back to it for at least 14 days for hygiene reasons as it sits on a supply of more than two years.
Christian Hawkesby, assistant Reserve Bank governor, said it made the decision in February to quarantine cash which comes back to it from the banks.
Globally there has been concerns sparked about the potential for cash to spread the coronavirus and some speculative stories in China have pointed to people physically washing money to ensure it is clean.
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But Hawkesby said cash should be treated like any other surface.
"Whether it is a credit card or mobile phone, just wash your hands regularly. It is not rocket science."
Hawkesby said it had been in talks with a number of central banks around the world who were doing the same thing.
But even before it decided to hold onto cash for 14 days its cash supply meant money took some time to come back into circulation.
"We have got two years worth of replacement cash. We've got such a large stock pile it meant even before we put that 14 day period in place the cash that was coming in wasn't going out in 14 days any way."
Hawkesby said it was also working with security firms and banks to ensure cash was being strategically distributed around the country so that if any regions were isolated as a result of the virus there would still be access to cash.
He said banks were increasing the amount of cash they were holding as a way to manage the issue.
"We are taking a system-wide approach and working closely with the banks and security companies."
Hawkesby said although the vast majority of people used electronic payments there were still pockets of people that were more reliant on cash.
Those people included children, the elderly and financially excluded people without bank accounts.
"These are people who rely on having a good operating system in place."