Removal of 1 cent : imminent monetary disaster

Posted On 13/11/2007

Filed under Food for thoughts

Comments Dropped 4 responses

Don’t ask me why BNM come out with this idea. BNM just propose to phase out 1 cents from the Malaysia monetary system, and the excuses : 1 cents mint are expensive to made.

In fact, monetary system are a delicate matters. Looking into the “supermarket” factor are plain idiocy. Contradict to smart alecks idea of removing 1 cents from the monetary system, the country monetary system actually exchange billions ringgit base on the small decimal points

And guess what, the modern world monetary system runs either digitally or physically. For example, online transaction, credit card payments, Bank overnight interest, are run using the decimal points few cents for individual consumer. Removal of the 1 cents coins mean more than remove the coins, it mess up with a BILLIONS RINGGIT of monetary system.

Worst, the annoucement is going to give a shocked to investor in KLSE. Think of this, if you stock are valued at RM1.26, RM4.91 , whether rounding up or “removal” of the cents is a huge profit and lost, especially to broker house that runs hundred millions of transaction.

And don’t forget, Malaysia ringgit foreign exchange rates still ties to the cents point. Because we are not using the Dutch system(without decimals), rounding up the 1 cents point will make Ringgit volatile to uncertainty.

OMG, it seems our country monetary policies are runs by a 7 years old mindset. What next? Print as much Ringgit as possible to fuel those economy region? And make Malayasia win the inflation race with Zimbwawe ?

Perhaps it is time to mortgage my small flag apartments and exchange to golds. The same amount of golds might buy back 5-6 houses if Malaysia government mess up the whole system.

Additional facts
US 1 cent coin are more expensive to produce than Malaysia 1 cent. With 10,000 more economic expert in US, nobody complain it is “inconvenience” and make a call to abolish the coins.

EU 1 cent coin are not cheap either.

Now I wonder where is this Half-past-six idea come from? Zimbwabwe?

———
Doing away with your 1 sen

Satu Sen Pun Takda Guna’ Will Literally Mean A Thing Soon

Bye -bye, 1sen coin

4 Responses to “Removal of 1 cent : imminent monetary disaster”

  1. tomatoinc

    Hi,

    Sorry to be demeaning, but when the BNM proposed to do away with 1cent coins, i don’t think BNM will force everyone (especially the stock-market brokers) to round up to the closest five-cents. This is only applicable to scenario where hard-cash is required for the transaction (i.e. supermarkets, dairy stalls). Your credit cards, bills, share prices will still be running on the smallest decimal unit.

    therefore, the so called imminent meltdown will not happen.🙂 many countries don’t have one-penny as well. Honestly, Malaysians don’t need one-cents anymore. You can’t get anything with it, and in fact, the value of the metal required to make it is probably more than the value of the coin itself.

    Peace.

    moo_t : Thanks for dropping by. However, I think everyone will be pleased if you give us example of country that drop the 1 cent denomination without trouble. A monetary system without decimal is doesn’t mean it can remove small denomination anytime they wish. BTW, it is ridiculous to have two separate monetary system, the confusion will break people trust on the money!

  2. Rauff

    well i think it should push the way for cashless transactions….imagine just using debit cards and a wave here and a wave there….so much easier.

    moo_t : Agree. And you don’t need to touch the volatile monetary system.

  3. Wuching

    we’ve gotten rid of our 1 & 2 cents pieces..good ridden!

  4. Y2K

    FYI, Singapore has done it a few years ago to minimal (if not zero) impact.

    Also, you have the wrong impression of the 1 cent removal; tomatoinc’s explanation is correct.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s