The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank's governor yesterday said the speed at which Bahamians are redeeming one-cent coins is presently below his expectations with less than $1m worth handed in to-date.

John Rolle, speaking as the Central Bank unveiled its assessment of the economy's 2020 full-year performance, said he thought more coins would have been handed in by now given that the one-cent ceased to be legal tender as at December 31, 2020.

"We are seeing a steady stream of persons submitting coins for redemption," he added. "Up to this point the effort has largely been based on redemptions by weight. We see a steady stream of redemptions but the level of redemptions from my personal estimate is lower than what I would have estimated."

"If you look at the volume of coins redeemed so far, it's still not adding up to $1m in coins. We know there are several million dollars worth of pennies that have been issued over the years and in circulation."

Mr Rolle acknowledged that not all one-cent coins will be redeemed, particularly those that were "taken outside the country in lose change" by foreign visitors and will never be returned.

Noting that Bahamians do not have to "roll" their one-cent coins into bundles, as they will never be returned to circulation, Mr Rolle said the Central Bank planned to "make some adjustments with commercial banks to ensure persons can deposit coins at the bank".

He added that the banking regulator also intends "over the next few months to do a tour of the Family Islands to collect any coins individuals have".

A Central Bank release last week provided one explanation as to why redemption activity may not have matched the governor's expectations. It said plans to allow Bahamians to redeem the huge quantity of one-cent coins they still hold via a series of kiosks set-up specifically for this task would not proceed.

The regulator blamed this on "matters beyond its control" but did not explain further, while adding that the kiosk network and its roll-out had been outsourced to a third party vendor. Previous Central Bank statements said the kiosks were due to be rolled out in areas with high consumer footfall, such as the Mall at Marathon and other major retail destinations.

Mr Rolle did not address the issue yesterday at a Zoom press conference where journalists were limited to just one or two questions. "The Central Bank will continue to redeem one-cent coins by weight and honour penny deposits at commercial banks until 30 June, 2021," the regulator had said. "The public can expect ongoing announcements of dates and venues for New Providence redemption sites.

"Beginning March 2021, redemption exercises will commence on Grand Bahama and the Family Islands. Dates and venues will be announced in the coming weeks. The public is invited to follow The Bahamas Penny Page on Facebook, and Central Bank of The Bahamas on Instagram, for updates on the redemption exercise."

The Central Bank previously said its plan to end the Bahamian one-cent coin's use as legal tender by end-2020 will save itself and the banking system $7m over a ten-year period.

The regulator, in its rationale for ending the coin's 54-year history as a means of payment, said it had lost 90 percent of its purchasing power and was "increasingly rarely used" in commercial transactions by the Bahamian public.

With a survey showing that just 52 percent of persons use the one-cent coin to pay for goods and services, and the use of electronic payment methods such as debit cards and wire transfers becoming increasingly popular, the Central Bank argued the costs of maintaining it as legal tender outweigh the benefits.

With businesses and banks incurring handling and processing costs greater than the one-cent coin's value, the banking industry regulator is estimating that its withdrawal as legal tender will result in annual cost savings of between $800,000 to $1m.