Tuesday, March 16, 2010

Small Money, Big Problems II

Yes, even in Ukraine, people argue that eliminating small coins will lead to inflation!

"Meanwhile, Oleh Soskin, director of the Society Transformation Institute, believes that this year the inflation in the country will be at the level of 25 percent. InterMedia Consulting informs that the expert sees the reason for price increase also in the desire of the National Bank to withdraw from circulation coins with the nominal value of one and two kopecks. In Soskin’s opinion, this betrays a deliberate stimulation of inflation. The expert stressed: “There is no need to withdraw one- and two-kopeck coins. Every country has those. It will lead to the rounding up of the prices. Nobody rounds them down. It means if the price was, for example, 34 kopecks they will make it at least 35 and 50 at the most, so that it would be possible to pay with one coin. There is no country where these coins are being withdrawn; they are very cheap. They should be a signal for people that there is a totally stable monetary system in the country, including the situation with coins.”

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