IDEAS home Printed from
   My bibliography  Save this article

Rounding is not to be feared


  • Erika Leszkó

    () (Magyar Nemzeti Bank (central bank of Hungary))


Nearly one and a half years have elapsed since the MNB withdrew 1- and 2-forint coins from circulation on 1 March 2008, which simultaneously saw the rule on rounding to the nearest value of 5 enter into force. While it was perfectly clear from a professional perspective that rounding would make cash payments easier on a daily basis, there was nevertheless strong concern surrounding the introduction of rounding. The actual developments, however, have not underpinned preliminary fears. The withdrawal of 1-and 2-forint coins did not bring about an inflationary effect, due to the symmetrical direction of the rounding for final amounts payable only, and the application of new rounding rules did not cause any particular difficulties. It does not come as a surprise that the use of rounding did not cause any disruption in the economy, as rounding has a more than decadelong tradition in Hungary on account of the withdrawal of the filler in the 1990s. In this article, we will present the reasons and the economic rationale behind the introduction of rounding rules with the help of Hungarian and numerous foreign practices. As Hungary’s legal tender will hopefully be the euro within a few years, the experiences of euro area countries in the practice of rounding will be examined more closely.

Suggested Citation

  • Erika Leszkó, 2009. "Rounding is not to be feared," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 4(2), pages 14-21, July.
  • Handle: RePEc:mnb:bullet:v:4:y:2009:i:2:p:14-21

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Robert Whaples, 2007. "Time to Eliminate the Penny from the U.S. Coinage System: New Evidence," Eastern Economic Journal, Eastern Economic Association, vol. 33(1), pages 139-146, Winter.
    Full references (including those not matched with items on IDEAS)

    More about this item


    rounding rule; withdrawal small change; elimination small denomination coins; 1- and 2-forint coins; filler; 1- and 2-cent coins; penny.;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mnb:bullet:v:4:y:2009:i:2:p:14-21. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maja Bajcsy). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.