Wednesday, June 12, 2024

10-centavo coins are not worth much but they’re costly little numbers

The lowest denomination of Mexican currency is the 10-centavo coin, a very small silver coin that is rarely used. But for the Bank of México (Banxico) it’s a costly coin to make.

Rising costs have pushed up the price of minting a single one of the coins to 19 centavos.

That’s up from nine centavos in 2012. The central bank’s production costs have risen 40%, even after opting for cheaper minting processes.

During the first six months of the year nearly 4.6 million pesos (just over US $246,000) was spent minting 24.1 million 10-centavo coins, while 100 million pesos has been spent making them since 2014.

A financial studies expert at the National Autonomous University (UNAM) explained that coin production costs depend on factors such as metal prices, production of the coin dies, distribution and salaries.

The cost of low-denomination coins has led many countries to phase them out, Miguel Ibarra said.

But if Banxico were to stop producing the 10-centavo coins, prices would instantly rise due to rounding up: if something has a price of 10.60 pesos but there are no 10 or 20-centavo coins, the price would automatically be rounded up to 11 pesos, he said.

Less expensive to produce are 20-centavo coins, which now cost 16 centavos, and the 50-centavo denomination, whose cost is 16 centavos.

Source: El Financiero (sp)

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