Adrien Szücs () (Magyar Nemzeti Bank (central bank of Hungary))
Abstract
On 23 June 2008 the Monetary Council of the Magyar Nemzeti Bank decided to reissue the 200 forint coin in the first half of 2009. In this study, we shall summarise the social and technical aspects considered during the preparatory phase of the decision. The case is justified by the difference between the ‘economy’ of small denomination banknotes and large denomination coins. In the case of small denomination banknotes, expenditures are incurred continuously, since – due to their fast wear and tear – significant reproduction costs can be calculated. Wear and tear in the case of larger denomination coins is negligible, therefore expenses are primarily incurred from the one-off manufacturing of the initial stock, which are only supplemented by meeting the demand arising from eventual turnover expansion. Switching to coins – as a function of the year of switching over to the euro – can generate savings of 8%-13% of the cash production costs incurred until then. Since Hungarians use 200 forint banknotes as change, they are quickly damaged and the resulting high reproduction costs increase state budget expenditures, i.e. the taxpayers’ burden. Coins – replacing the easily damaged small denomination banknotes – are more durable, their handling is safer and their use is more practical in numerous cash payment situations. Another consideration was to approximate the denomination series of the forint to that of the euro, thereby accustoming the population to the larger denomination coins and converting them into conscious users. Following transition to the euro, the purchasing power of the coins will be higher than in the forint period, thus the introduction of the 200 forint coin may be considered as preparation for the euro.
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Article provided by Magyar Nemzeti Bank (The Central Bank of Hungary) in its journal MNB Bulletin.
Volume (Year): 3 (2008) Issue (Month): 3 (December) Pages: 33-40 Download reference. The following formats are available: HTML
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