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Central Bank of Russia wants to discontinue production of 1- and 5-kopeck coins

20 September 2010 11:26 (UTC +04:00)

Baku â€“ APA-Economics. On September 20, the Central Bank of Russia has requested consideration of the discontinuance of coins in denominations of one and five kopecks by the State Duma, BCM reported.

Today, the Duma’s Committee on Financial Markets is going to consider this proposal. The central Bank has calculated that minting of 1-kopeck coins costs 47 kopecks a piece, and of 5-kopeck coins â€“ 69 kopecks.

In 2010, the production of coins increased in price significantly due to the fact that the price of copper has risen by 37.8 percent compared with the previous year, the price of nickel â€“ by 43.6 percent, and the price of cold rolled steel â€“ by 32.6 percent.

Last year, the cost of production of small coins was about 168 million rubles. On July 1 the total amount of one percent was their weight, while 29 percent - in total.

According to the Constitution of the Russian Federation, the Central Bank has the right to cease the production of certain coins on its own, but this time it decided to consult with the State Duma. The Parliament believes that the Central Bank’s project will be approved.

The new legislation suggests downward rounding of the payment amount for cash payments up to 10 cents. In non-cash payments, tariffs and prices will not be rounded. The production of coins will cease, but they will remain in monetary circulation, which is not supposed to strongly affect the consumer, because there are now 7.8 billion 1-kopeck coins and 5.8 billion 5-kopeck coins in circulation â€“ 51 and 40 pieces respectively per each citizen of the country

In 2008, CBR already put forward a similar proposal, as two years ago the production of these coins was not profitable either. However, at that time the offer was rejected because, according to officials, it would accelerate inflation.

The Central Bank conducts consistently the policy of money adjustment. The five-thousand-ruble bill was first introduced into circulation in 2006. At the moment, the share of these bills makes 45 per cent of the total amount of money.