Changes to New Zealand's 'Silver' coins

Changes to New Zealand's 'Silver' coins

The Reserve Bank today announced its decisions to modernise New Zealand's silver-coloured coins. After extensive research and careful consideration of the issues, the Reserve Bank said it had decided to follow through with its proposals announced in November last year.

The decisions are:
* the current 50, 20 and 10 cent coins will be made smaller, and of lighter and lower-cost plated steel; and
* the 5 cent coin will be taken out of circulation.

The $1 and $2 coins will be retained, as will the existing images on the 50, 20 and 10 cent coins, including that of the Queen.

Reserve Bank Governor Alan Bollard said the current silver coins were among the largest and heaviest in the world. "Due to past high inflation our 5 cent coin is now worth less than half what a cent was worth back in 1967," he commented.

Dr Bollard said the changes to New Zealand's silver coins would give New Zealand a coherent and logical set of coins that would be more convenient for the public, easier for those handling coin in bulk, such as banks and security firms, and less costly to manufacture, saving the taxpayer approximately $2 million annually.

The Reserve Bank had commissioned research and consulted extensively with representatives of banks, security companies, vending machine suppliers, retailers, community groups, as well as inviting public submissions on the proposals announced in November last year.

"Some people have expressed concern that withdrawing the 5 cent coin would cause inflation, as retailers would round prices up," he noted. "We believe this is unlikely to occur as retailers would round up and down as they did when the 1 and 2 cents were removed in 1990 and rounding would only affect cash transactions and only final totals.

"These are important changes that will affect everyone in New Zealand. They will bring major benefits to the users of coins - the general public - as well as businesses involved in handling cash and their staff."

The Reserve Bank plans to issue the new coins around July 2006. The Reserve Bank will be working closely with banks, security companies, vending machine suppliers, retailers and community groups to ensure a smooth transition.

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