Pilgrims Blamed for Coin Shortage|
March 04, 2014
When a nation experiences a coin shortage someone has to be blamed. Don’t count on a government blaming itself. Blame someone else. In the case of Sri Lanka blame is being placed on Lankan’s depositing coins at religious shrines in India while traveling there on pilgrimages.
There may be some merit to the accusation. The Central Bank of Sri Lanka estimates between 10 and 22 tons of their coins are now resting “unused” at Buddhist temples and Hindu kovils from Dambadiva pilgrimages to India. Sri Lanka would like to have these panduru meritorious offerings back and has asked Indian officials for their assistance in reacquiring them.
Not wanting to anger the many religious persons in Sri Lanka more than they have to, the central bank is also blaming the entire nation for hoarding coins rather than depositing their coins in banks.
This may get closer to the real problem. The banking sector of the domestic economy is still in its infancy. Most households don’t trust banks, especially in rural areas, choosing to keep their money literally under their mattress. A central bank source estimated more than 2.3 billion coins are stored at home rather than deposited into bank accounts.
Seven years ago in 2007 the government made an attempt to free up some of these coin hoards by encouraging children to use rather than save them.
This isn’t the first time Sri Lanka has had a shortage of coins for circulation. Despite the low purchasing power of coins they remain popular as a form of exchange. People leave the coins in temples as offerings. Drivers bless and keep the coins hoping for good fortune to come their way. Many of the coins have been scrapped to be recycled into jewelry, a practice that is now illegal in Sri Lanka. One newspaper recently reported coins being superior to use as hardware than are nuts and bolts purchased at hardware stores. Coins are likely cheaper to use as well.
Several coin denominations previously issued in copper are now only available composed of aluminum. A 1-cent rupee coin has a value of about 1/126 of a US cent. Sources suggest it is still popular in Sri Lanka due to the fear of inflationary pressures to round up prices if the coin is officially withdrawn.
Adding to the problem, the Jan. 5 Sunday Times newspaper reported Sri Lanka Central Bank Governor Ajith Nivard Cabraal announcing a new series of 10-rupee coins to be released on which unique archaeological, cultural, economic, environmental, religious, or social characteristics of each Sri Lankan’s district will be depicted. These circulating commemoratives will likely be collected and hoarded rather than used, further straining the nation’s coinage supplies.
Sri Lanka’s current coinage was introduced in December 2005. The series consists of 25- and 50-cent, and 1-, 2-, and 5-rupees denominations. The 1-, 2-, 5-, and 10-cent coins remain as legal tender, but are not usually available at banks. These lower denominations are no longer being produced, the reason being cost and a lack of commercial demand for them.
The Sunday Times reported, “Bus commuters complain that on many occasions they found it difficult to get their change money from bus conductors.”
The Central Bank of Sri Lanka also issues bank notes. These notes are printed by De la Rue Lanka Currency and Securities Print (Pvt.) Ltd. and by Note Printing Australia.
(Image courtesy Bgag, Wikimedia Commons.)
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On March 4, 2014 Paul Sur
On March 4, 2014 lakdiva
On March 4, 2014 Chingatch
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