LOSING MONEY BY MAKING MONEY
It must be the ultimate recession story – the State has lost money by making money. The Central Bank was forced to withdraw almost €23 million worth of coins from circulation last year resulting in a €30 million hit to the Exchequer. According to the Sunday Business Post there was a sharp fall in demand for coins because of the recession.
The Bank said it was forced into the withdrawal because of a fall-off in demand for smaller denomination coin. Cash businesses, such as shops and pubs, needed lower stocks of coins as the recession resulted in fewer transactions and banks opted to return their surplus coins instead of incurring substantial storage charges.
As a consequence the Central Bank sought a reimbursement of €30 million in profit that had been given to the Exchequer in 2008.The bank earns profit on the difference between the face value of a coin and the cost of producing it. The volume of coins issued has fallen from 446 million in 2007 to 112 million last year.