Est. 2007

Where’s my 2 cents Fiji?

In Life on September 29, 2008 at 5:50 pm

The RBF as of October is removing from circulation the one and two cent coins. Smart? Maybe and maybe not. Let’s look at the pros and cons and perhaps a few other countries.

Cons:

Well firstly, some inflation? Removal of low denominations ought not to cause inflation but it may it rounding is abused. This may occur in a country like Fiji. Items that a readily bought will have their prices rounded up at the shelf and when mixed with other items at the cashier the prices may be further rounded up; therefore, the stores effectively charging more. Though from research it is clear that it is a non-issue in later years and does not affect the economy when proper practices are in place.

Secondly, beggars aren’t going to be too happy. Usually we would give away our coins to charity or to religious places or to donation drives.

Pros:

Well there are many. Firstly, the one cent coin costs 4 cents to make. Added to that fact is that they are often collected and not tendered back, leaving them in drawers and other places where they will not be utilised.

Secondly, not having to deal with these coins means that labour costs are saved, not only by RBF but also by businesses who no longer have to cater for the floats with these coins. The cashier also does not need to count out and give out the coins saving them precious time.

As stated earlier, the coins have limited use; they are only given out and not taken back as counting a bulk of the coins will again cost the company or bank more money than what the coins are worth.

The value of the cent is so low that no item can be purchased by the coin alone. The FJD cent is of course valued less than the US dollar equivalent. Other countries including the Australia and certain European countries have stopped the minting of some of these low denominations. Sweden would be one of the first and hence were the ones to come up with rounding to solve the problem often caused at the checkout. New Zealand on the other hand has removed from circulation the one cent, the two cent and the five cent coins, leaving the lowest denomination as 10 cents. The ten cent coin is also a copper coin. Needless to say, they went on further to make the other coins smaller and lighter so that our wallets and pockets would not be laden with coins that were far too heavy. They are now some of the most light coins around.

Lastly, some of the things that we do not think about. The coins are small and often get lost, so they are not so beneficial to the consumer. The coins are hazardous to small kids who may find the coin small enough to swallow. Seeing as the coin is now intrinsicly valued more than its face value, it becomes a target for copper extractors who can melt coins to gain the metal components. In my honest opinion, this may be difficult in Fiji but there is no lack of motive. Thieves often loot building sites for copper wire; it wouldn’t be a surprise if they suddenly started selling out coins.

All in all, we’d better get out those money bags cause I know we’ve all been hording some of those coins. Who knows, you might get a couple of bucks richer by the weekend.

The Spray Can

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