Use of small change has fallen as prices increase
Vietnamese notes and coins below VND5,000 (US$0.24) in value could die out in the market since price hikes make it hard for people to keep and use them in trading, an economist says.
Goods now fetch high prices, so trading with small change has fallen, Vu Dinh Anh told VnExpress Tuesday.
The report quoted a woman called Ha as saying: “I find small change worth nothing in our daily life, so I don’t want to receive it.”
Chuong, a resident of the capital city, said, “I ask vendors to keep the change of VND500-1000 because I cannot buy anything with it.”
Small traders have been affected by this regular habit of denying small bills or coins. They have to accept late payment or lose customers since they do not have notes of low value and coins for a change.
Anh also attributed the sharp decrease in small change to a decision by the State Bank of Vietnam to limit the issue of small bills or coins.
Many supermarkets give customers candy or chewing gum due to this shortage, but some customers do not like this solution.
Tuan, another Hanoi resident, said: “I am annoyed when I get candy instead of change every time I go shopping. I don’t want candy so I refuse it, but they don’t have change and of course I lose my money.”
Pham Thi Huyen Trang, who works for the Tien Phong bank, said the typical minimum denomination for deposits or transfers was VND50,000. She added that the bank keeps some low-denomination currency, but there seems to be no demand for it.
Vietnamese monetary system currently has small bills and coins in denominations of VND200, 500, 1,000, 2,000 and VND5,000. The highest denomination in Vietnamese currency is VND500,000.
Small change is now used often to fold origami figures or donate to pagodas and temples. Bills with special serial numbers are traded on the internet, according to VnExpress.
In April last year, the central bank announced it has halted issuing coins.
Annual inflation in Vietnam has reached double figures in the last two years, surging from 6.8 percent in 2009 to 18.58 percent in 2011.
Government data showed a 5.35 percent inflation rate in July. It expects inflation to be contained at 7-8 percent in 2012.