Vietnamese economist urges government to withdraw coins

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The government should withdraw currency coins from circulation since they are barely used, an economist said.

Le Dang Doanh, former head of the Central Institute for Economic Management, told Tuoi Tre newspaper December 6 that only when vending machines become popular in Vietnam would people find coins useful.

Le Ngoc Thuy of Ho Chi Minh City's Go Vap District said: "I have not used coins for several years because all vendors refuse coins."

Hung, the owner of a grocery shop in the city's Tan Phu District, said coins have become less and less preferred because of their low quality.

"If they get wet, they will easily become tarnished," he said.

The government issued coins in denominations of VND200, 500, 1,000, 2,000, and VND5,000 (24 US cents) in late 2003 mainly for use in vending machines.

But there was no move toward using the machines.

The coins' values are too small while prices have kept increasing, making it hard for people to use, Doanh said.

Shockingly, even banks refuse to accept coins.

Trung of HCMC's District 11 told Tuoi Tre that he was asked for a fee at a Sacombank branch when he used coins to pay his electricity bill of VND1 million ($48).

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The bank said the fee was for "counting" and demanded 25 percent of the value of the coins, in his case VND50,000 for VND200,000, he said.

Mai of District 3 said an Agribank branch refused to accept coins when she recently paid her bills.

"The banker told me that coins are not used in the market any more, and asked me to exchange them at the bank's headquarter."

She has a large number of coins, but no one accepts them, and she can only use them as a collection now, she added.

Le Thi Thanh Hang, deputy director of the State Bank of Vietnam's HCMC office, said banks cannot refuse or charge a fee to accept coins.

"If asked to pay a fee, customers should ask the banks what regulation the demand is based on," she said.

Some banks, which asked to remain unidentified, complained they cannot make payments using coins since no one wants them.

They have to return the coins to the central bank, a tortuous process since they have to categorize them by value and pack them in bags of 1,000.

The central bank announced in April last year that it has stopped minting coins.

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