Top Central Bank economist calls for 1c and 2c coins to be dumped
Published 02/07/2014 | 10:38
A CENTRAL bank economist has called on the Finance Minister to take 1c and 2c coins out of circulation.
Speaking to the Herald, Ronnie O'Toole, economist with the National Payments Plan (NPP) in the Central Bank of Ireland, said the recent Wexford rounding trial should be rolled out nationally.
The results of the trial last year showed strong support for getting rid of the coins.
During the experiment, retailers rounded cash transactions to the nearest 5c at the cash register, removing the need for 1c and 2c coins.
According to Mr O'Toole, the 85pc of customers and 100pc of retailers said the removal of the coins should be extended to the rest of the country.
One concern consumers had was retailers would round up the price of goods, but a mystery shopping exercise found it had no inflationary effect.
Currently, 1c and 2c coins are minted more than other coins, but they go out of circulation much quicker as people tend to stockpile them at home in jars. According to Mr O'Toole, the coins also cost more to mint than they are worth.
"The 1c coin costs 1.7c to make and that does not include security or baggage costs. A 2c coin costs 2c, so they're losing value before they leave the mint," he said.
"Since the rollout of the Euro, we have produced €1,500 in 1c and 2c coins per family - that's one and a half stone in weight," he added. "Older people in particular found it difficult to distinguish between them or even see them.
"We found a level of anxiety using them when you're waiting for 1c change in a shop. If you stay to collect it, you look mean; if you walk away, it's disrespectful."