Russia could lose its smallest coin denomination, the one-kopek. The St. Petersburg Times reports the coin’s possible elimination was voiced by Arkady Trachuk. Mr. Trachuk is the General Director of Goznak, the Russian government agency responsible for printing banknotes and minting coins.
In parallel thinking, the reasoning is nearly identical to those who would like to see the U.S. Lincoln cent eliminated:
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Metal prices are higher now, making coins more expensive to mint compared to what they are worth
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The coins no longer have the buying power they once did
The elimination of the single kopek is not a done deal. There are apparently other proposals to consider, like using less expensive metals in making the coins. If that sounds familiar, it’s because the U.S. is also considering that quagmire in a newly introduced House bill.
When other countries have eliminated their smallest coin, they generally experience a time where prices for goods and services rise. The increases are the result of rounding prices to the next highest denomination.
While that is certainly a concern in the U.S., some economists in Russia believe their situation is different.
“If they get rid of the one kopek, it will not have a big impact. It has become so small, and inflation is on the rise,” said Tatyana Orlova, an economist at ING. “Many shops have [already] rounded up their prices … So if they take [the single] kopek out of circulation, it should not affect prices greatly.”
Given the current climate in the U.S., it would appear more likely that Russia would drop their smallest coin before the U.S.
For the entire St. Petersburg Times article discussing the one-kopek and its possible future, read One-Kopek Coin Facing Extinction.
