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Wednesday 08.04.2020 | Name days: Dana, Dans, Danute, Edgars
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Lithuania to consider dropping smallest- value euro coins

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Lithuania, money, euro cents, economy, retail, finance

To take one and two-cent coins from circulation, such is the idea the Bank of Lithuania will start a discussion on. Retailers, however, see risks in consumer mood over rounding sums up.

Lithuanian public broadcaster LRT reports on Sunday, December 29, that one and two cent coins are minted in the biggest quantities, but once they are released into circulation, about two thirds disappear probably at the bottom of our pockets and drawers.

A recent Eurobarometer survey has shown that 59 percent of people in Lithuania wouldn’t mind giving up the two smallest coins.

The Bank of Lithuania is now planning to survey the public and retailers over January–March and, should the results be favourable, propose that Lithuania join several other eurozone countries and discard one and two cent coins.

Already, richer eurozone countries like Ireland, the Netherlands, Finland, Italy and Belgium have withdrawn 1 and 2 cent coins from circulation.

The change does not mean that retailers will not be able to price their goods 2.99, but if the shoppers pay in cash the total sum will have to be rounded up or down to the nearest five cents.

Deivis Stankevičius, the head of the central bank’s Cash Department, says the rounding rules should not affect inflation – or the general level of prices – in any way.

Businesses, too, maintain that fewer low-value coins would cut their cash collection costs, cashiers would have it easier and the state could save on minting. On the other hand, Lithuanian shoppers are very sensitive to prices, they say.

«For instance, if the sum on the receipt ends in 9, it is rounded up to 10, that is, they have to pay one cent more. It may not look like much, but when consumers are so conscious of prices, it may be significant,» says Rūta Vainienė, the head of the Lithuanian Association of Retail Companies, adding that the central bank should consider this carefully before doing away with low-value coins.

The Bank of Lithuania argues that, even if the country adopts price rounding rules, shoppers will be able to pay with 1 and 2 cent coins indefinitely, only won’t get them back as change, LRT reports.

The article originally appeared on LRT English: https://www.lrt.lt/en/news-in-english/19/1127762/lithuania-considers-discarding-lowest-value-euro-cents


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