Estonia Might Apply Rounding-off Rule to Reduce Circulation of 1 and 2-cent Coins

19 Jan 2018  Fri

Bank of Estonia is planning to reduce the production of 1-cent and 2-cent coins for gradually removing them from circulation. They are also planning to round-off cent values at vendors to the nearest 5 cent-rounded amount.

1 and 2-cent coins are generally offered as change to buyers in shops and remain unused after that. The central Bank proposed that it would be better to reduce the number of these coins in circulation since they are majorly unused.

The rounding off would have to be done in case of cash payment. However, the exact amount can be charged in case of cash payments. People can continue to pay using the same coins but they won’t be handed back as change. Vendors will have to update the software of cash registers for the rounding off process.

Some experts believe that this would be a good move as clerks in stores will not have to waste time counting coins and the time required for related procedures will be reduced too. The lowest-value coins are generally discarded later as people find it difficult to handle them. As per a poll, over half of Estonian residents are okay with the rounding-off idea. The European Commission does not recommend rounding-off if people of the country don't support the idea. Finland, the Netherlands, Belgium, Ireland, and Italy have already applied the rule. Prices didn't rise even after that in these countries.