Removing Hungary’s smallest-value coin from circulation not worth the effort, says Central Bank

Retiring the coin would cost more than keeping it in circulation, Central Bank Governor György Matolcsy explained

editor: REMIX NEWS
author: Index
Five forints coin

Following a parliamentary request by far-right opposition party Jobbik to retire Hungary’s smallest-denomination coin worth five forints, the Central Bank replied that taking it out of circulation would be a logistics exercise not worth the effort.

The five-forint coin currently has a value of €0.013. Made of copper, nickel and zinc, its scrap price is above its denomination value.

In response to the motion, Central Bank Governor György Matolcsy pointed out that when withdrawing a denomination, it is important to pay attention not only to the cost of raw materials, but also to the costs of collection after withdrawal, as these can consume significant amounts. However, he admitted that with the current metal prices, the five-forint coin is really worth more than five forints. Despite this, long-term decisions cannot be made based on current values since metal prices change constantly.

According to the governor of the Central Bank, there are currently 764 million five-forint coins in circulation, so in the event of a withdrawal decision, assuming a 50 percent return, 1,604 tons of coins would have to be handled, which would entail significant costs.

In his response, Matolcsy also mentioned that in such cases, the use of the coin must be taken into account, and, according to the data, the five-forint coin is actively involved in the circulation of money.

Hungary retired its previous lowest-denomination one- and two-forint coins in 2013.

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