After being issued for several years, coins have been rejected from circulation. Why?

The State Bank of Vietnam (SBV) in December 2003 issued coins with face values of VND5000, VND1000 and VND200. In April 2004, it issued VND2000 and VND500 coins.

According to the SBV Governor, the issuance of VND500 and VND2000 coins aimed to meet the requirement of monetary circulation.

However, after seven years, coins have nearly disappeared from the market. Housewives have not used coins for several years because they are not accepted by traders at markets.

“Traders are willing to allow me to owe the money. They definitively don’t want to receive coins,” said Mrs. Thanh from Thanh Xuan district, Hanoi.

The author of this article purchased VND1000 of onion at Dong Tam market, Hanoi, and paid by coins but the seller didn’t accept and said: “You should keep them as souvenirs. Other sellers in this market will not accept it either. If you show them coins, they may scold you”.

Hai Ha, an office employee in Hanoi, said: “I often buy office stationery at supermarkets. Sellers sometimes gave me coins back. I didn’t receive them or changed into candies. Now nobody uses coins. Using coins is very inconvenient. Moreover, coins are very ugly because they go black and dark”.

There was a time coins were warmly welcomed in Vietnam. People bought small bags to keep coins and coins were used as New Year’s presents to kids.

By May 2005, the volume of coins in circulation accounted for one fourth of the total value of changes. To encourage the use of coins, the SBV proposed the government to reduce printing paper banknotes of small face values. Some companies installed telephone boxes using coins and vending machines in Vietnam.

However, turnover from vending machines placed in front of the Hanoi Railway Station was only VND100,000 ($55) a day so these machines gradually disappeared. Coins have been also gradually been rejected from circulation.

Tung Anh, a 7^th grader in Hanoi, said: “My parents sometimes gave me coins to put into my money box but when I broke my money box, the coins turned very black and dark. Since then my parents have not given me coins anymore”.

Experts explained that Vietnamese people are only used to paper banknotes because banknotes are small and light. Coins are easy to lose.

Admitting that the issuance of coins is ineffective, SBV Governor Nguyen Van Giau told the recent National Assembly session that the issuance of coins was the plan of his predecessor and it was approved by the government.

Giau said he carefully researched the situation and proposed that the government stops issuing new coins. However, the coins that have been issued are still valid.

PV