Riksbank urges Sweden to ditch 50 öre coin

Riksbank urges Sweden to ditch 50 öre coin
The Riksbank wants Sweden to ditch the 50 öre coin, currently the smallest denomination of the country’s currency.

The central bank on Thursday issued a call to the Riksdag to enact a law which would invalidate the coin, which is worth half a krona ($0.07), as legal tender by September 30th, 2010.

“The Riksbank’s statistics indicate that the 50 öre coin is used increasingly rarely as a means of payment,” the bank said in a statement.

“According to a survey of the general public commissioned by the Riksbank, two out of three respondents consider that the coin is no longer necessary. The retail trade would also prefer the coin to be abolished.”

The suggestion comes from an ongoing examination about Sweden’s coins and currency.

“We’re also looking at the 1000 kronor bill. We’ve seen a reduction in demand for the 1000 kronor bill,” said Leif Jacobsson, a project leader at the Riksbank, to the TT news agency.

The small, copper-coloured 50-öre coins have been Sweden’s smallest denomination coin since 1992 when the 10 öre coin was taken out of circulation.

Should the 50 öre coin also disappear, the 1 krona coin would become Sweden’s lowest denomination coin.

The Riksbank added, however, that even if the 50 öre is discarded, the “öre” will remain as an arithmetical unit for payments and transactions.

“Electronic payments made, for instance, by card will not be affected if the 50 öre coin is abolished. Cash payments, on the other hand, will need to be rounded off to the nearest krona instead of to the nearest 50 öre,” said the Riksbank.

According to the bank, abolishing the 50 öre coin will not likely affect the consumer price index (CPI), from which the bank calculates Sweden’s rate of inflation.

Jacobsson said the Riksbank’s final report on possible currency and coin changes will be submitted to the bank’s leadership sometime in the spring.

Other changes under discussion include a re-introduction of the 2-kronor coin, the launch of a 200 kronor bill, and possibly replacing the 20 kronor bill with a coin.