$5m-$10m savings from coin changes: RBF

Fiji’s central bank says the country will save $5 million to $10 million in minting costs by not making one and two cent coins over the next seven to 10 years.

However, the Reserve Bank of Fiji said the decision to cease the production of one and two cent coins were not so much about minting costs, but the growing insignificance of its values.

Responding to public opinions over Cabinet’s approval to cease the use of 1 cent and 2 cents coins, RBF Governor Savenaca Narube said the decision was taken with considerable thought, evaluation and research, which included a public opinion survey.

He said the structure and composition of a country’s currency was not a static issue.

“It is a dynamic one. It needs to be reviewed over time to take into account changes in spending patterns, consumer behaviour, inflation, rise in income, advance in technology, the cost of minting and the experiences around the globe,” Narube said.

“We have taken all these into account in this instance. It should also be reassuring to know that Fiji is not alone in this area,” he said.

“The major reason why the circulation of one and two cents will cease is not so much because of the cost of minting them but more so because these coins hardly circulate any longer.

“Due to the rise in incomes and prices, these coins have lost their value and, therefore, when issued into circulation, they do not change hands or circulate like other denominations,” Narube said.

“Instead, as we all do, we accumulate them in jars, bottles and containers at our homes and offices. This signals clearly to us that their value is virtually insignificant and people do not need them any longer,” he said.

“The cost of minting them therefore becomes an unnecessary burden.”

Narube said even if the coins were to be minted with cheaper metals as suggested by some members of the public, it would still cost money to mint.

“Why should the country pay to mint these coins only so we can continue to accumulate them at our homes and offices? It does not make sense. It is clearly an unnecessary use of scarce public resources,” he said.

He said the costs would be even higher when it’s toppled with costs of handling and storage.

Narube said these savings could be used by the Government for other productive purposes.

“We are confident that this change will benefit the nation immensely now and into the future,” he said.

“Like any change of this size, there will be some misunderstandings and perceptions. I therefore wish to appeal to the public, traders, commercial banks and everyone to support this transition to the issue of Fiji’s new coins,” he said.