To reduce the amount of cash trucked through the desert for Arizona's money supply, the Federal Reserve plans to build in Phoenix its first stand-alone cash processing center.

The Fed culls worn and counterfeit currency from circulation and replaces it through its 12 district banks and their 25 branches. Cash for the Phoenix area is processed at the Los Angeles branch of the Federal Reserve Bank of San Francisco.

The seven-acre Phoenix center is scheduled to open in September 2001 with a staff of about 50. It is expected to distribute $4 billion to $8 billion a year, a spokesman for the Los Angeles branch said. The branch, serving Arizona and the southern parts of California and Nevada, distributes $48 billion annually.

Keeping more cash in the Phoenix area could cut costs and reduce security risks, the spokesman said. The armored trucks that shuttle cash between Phoenix and Los Angeles have high insurance premiums because they "are going through somewhat isolated areas," he said. Citing security concerns, he declined to disclose how many runs the trucks make every week.

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