Vietnam Central Bank Denies Recall
The announcement made a day earlier by State Bank of Vietnam deputy director for HCM City Le Thi Thanh Hang was published in the Tuio Tre News. Although the source of the rumour was not confirmed, Vietnam did stop issuing new coins in 2010 due to the rising cost of steel used in their composition. It is now less expensive for Vietnam to produce polymer composition bank notes than metal coins.
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It became necessary to address the rumours when merchants began to refuse to accept coins entirely. According to the May 26 Tuio Tre News, “The announcement was made after many small traders in Binh Tien market in District 6, and Cho Lon (Lon Market) in District 5 refused payment in coins, following a rumour that the government will withdraw all coins in the market and stop their circulation as of May 27.”
Hang made it clear in the announcement that coins refused by merchants as payment for something as well as damaged coins can still be used at post offices, supermarkets, or can be exchanged for undamaged coins at either local banks or at the state treasury.
Vietnam unified its coinage on May 3, 1978 following the end of the Vietnam War. At that time the newly unified currency was valued at one North dong and at 0.8 South dong.
The unified dong currency was revalued at one new dong equal to 10 old dong in September 1985, a move that led to inflation. In 1985 bank notes were issued in denominations of 5 hao, 1, 2, 5, 10, 20, 30, 50, 100, and 500 dong. As inflation continued throughout the 1990s the low denomination bank notes disappeared from circulation, while notes in ever-increasing denominations were being introduced. In 1990 notes were introduced in denominations of 10,000 and 50,000 dong, followed by a 20,000-dong note the following year, a 100,000-dong note in 1994, a 500,000-dong note in 2003, and a 200,000-dong note in 2006.
Coins had vanished from circulation due to their low purchasing power. On December 17, 2003 Vietnam re-introduced coins in denominations of 200, 500, 1,000, 2,000, and 5,000 dong, each having been issued by the Mint of Finland.
About the same time polymer replaced cotton in Vietnam bank notes. Vietnam claimed the switch reduced manufacturing costs, however several domestic newspapers criticised the change, pointing out printing mistakes while accusing the son of the governor of the central bank of benefiting from the new printing contracts. The government reacted to the claims by banning two newspapers from publishing for a month while considering sanctions against other newspapers that were making similar claims.
The major reason for the re-introduction of coins was to support the vending machine industry. During the 1990s and early 21st century it had become necessary for consumers to exchange bank notes for tokens in order to use vending machines.
According to the Tuio Tre News article, “Exciting to see the coins reappear after many years at first, local residents however soon considered them inconvenient as the coins easily drop out of the pockets or become tarnished.”
The dong received the dubious distinction of being the least valued currency unit in the world when on August 1, 2006 Zimbabwe revalued its dollar. Since that time the two currencies have vied for last place in exchange value on the world market. Zimbabwe abandoned its own currency entirely in favour of foreign currencies including the US dollar in April 2009. Since that time Vietnam has continuously held the last place spot regarding foreign exchange values
