COLOMBO (AFP) - State-owned banks are offering colour pencils, felt pens, drawing paper and books to children who part with their savings in exchange for bank notes, promising the gifts will be worth 20 percent more than the coins handed in...The predictable if ironic result of this program is that given the government's admission that the coins are worth 20% more than the bills they offer, people are even less likely to turn in their coins, necessitating a further "clarification":
The offer of an extra 20 percent in the form of gift coupons coincided with the traditional new year last month and followed a major shortage of coins essential for the cash-reliant transport and retail sectors.
May 8, 2007 (LBO) – Sri Lanka's central bank says there is no 'shortage' of coins in the country, and a campaign to bring back coins into circulation has been mis-understood by the public...That's rich. There are plenty of coins. We just need your coins so we don't have to make more. But both articles have a few interesting facts to note, since we are at most a few years from a similar situation ourselves:
"It is possible that this coin collecting campaign may have been misunderstood as being carried out due to a shortage of coins and therefore the Central Bank wishes to assure the public that there is no shortage whatsoever of any coins and that ample stocks can be obtained from commercial banks or the Central Bank," the monetary authority said in a statement.
Central Bank says it wants old coins to be put back into circulation to "save valuable foreign exchange that is spent annually on minting new coins".
- Minting cheaper steel coins plated with copper and nickel has not helped, according to the Central Bank of Sri Lanka. This will be our government's second response, the first being the threat of jail for those who melt or export coins (see point 4), and it actually will work here for a while because our economy is much less coinage-based.
- The central bank tried in 2001 to coax people to put unused coins back into circulation by urging students to break into their piggy banks, but the scheme flopped. Of course it did. When the government admits that their currency is going broke, why in the world would people give up their coins for currency, even for a 20% (1 year's worth of inflation in Sri Lanka) premium?
- The bank has already issued small coins with a fraction of the metal weight of the previous ones...the newer coins are now being made into 'washers' used to tighten nuts as the coins were found to be cheaper than the real thing. I'm not sure that even needs a comment.
- Jewellers said it made good business sense to melt down the coins, albeit illegally, although no one would admit to doing so.