TUESDAY-18TH DECEMBER 2007- ONE SEN coins: Bank Negara says no plans yet to demonetize them

ONE SEN coins: Bank Negara says no plans yet to demonetize them
KOTA KINABALU: There are no plans to demonetize one sen coins following the Government’s move to phase out one sen coins from over- the-counter transactions, said Assistant Governor of Bank Negara Lillian Leong Bee Lian. The main objective of the rounding mechanism, which will be implemented on April 1 next year, is to reduce the demand for one sen coins around the country, according to her. “Of course the plan is to reach a point where people will stop using one sen coins, but for now there are no plans to demonetize one sen coins yet,” she said at a press conference after the launch of a briefing session with business and trader associations on the rounding mechanism at the Magellan Sutera here, yesterday. Deputy Minister of Domestic Trade and Consumer Affairs Datuk S Veerasingam, who officially launched the briefing session, noted that his Ministry would be implementing various awareness programs around the country in addition to going through the mass media to ensure the public is aware of the mechanism.
“I must stress that the mechanism will not increase the cost of items being sold. It will only affect the overall cost when you pay the bill and not for individual items,” he said at the press conference. “As it is, there are not many consumers who use one sen coins. When they go out to buy things, they do not bring one sen coins to pay ... some even leave the one sens on the counter after receiving their change or drop them in charity boxes. “For the traders, they will still have to return every sen to their customers and this means Bank Negara will constantly have to mint new one sen coins which eventually will not find their way back to the bank. “For the one sen coins to participate in the economic cycle, they must make their way back to the bank but that is not happening so it would be more prudent economically if we take out the one sen coins from the transaction,” he said. In his speech earlier, Veerasingam explained that the key justification for the mechanism’s implementation is that it saves money and eases calculations. “The initiative will make it easier for the public and also reduce costs for the Government and traders. “The public will no longer have to bring around one sen coins to make purchases and calculations for payment are made easier while traders can save on transport and operating costs with a reduction in demand for one sen coins,” he said. Veerasingam noted that traders will not need to change their cash registers and will only need to make a one-off calibration so their machines will display the overall payment on the bill before and after rounding. The mechanism, announced by Minister of Domestic Trade and Consumer Affairs Datuk Mohamed Shafie Apdal early last November, will round off bill payments in over- the-counter transactions to the nearest multiple of five. Shafie said there are around 4.4 billion one sen coins in circulation with a total of 360 million new coins minted by Bank Negara at a cost of RM14 million every year. The mechanism is adapted from similar initiatives employed by countries that have stopped using one cent coins such as Australia, New Zealand, Singapore, Switzerland and South Africa.