Farewell, penny

As The Bahamas closes the final chapter of 2020, it is also saying farewell to the penny.

The first penny was minted in 1966 when the Bahamian dollar officially replaced the British Pound Sterling.

Now today, 54 years later, marks the final day the one cent coin will be considered legal tender, however Bahamians have another six months – until June 30 – to redeem their pennies.

Up to last week, The Central Bank of The Bahamas (CBOB), through its penny redemption exercise, had collected roughly 25 million pennies which translates to $250,000, Manager of the Currency Department at CBOB Jermaine Campbell said.

“Today is the final day for 2020 and we will announce collection dates for January 2021,” he said.

“So, the redemption exercise continues through to June 2021. Now [Wednesday] is the last day that the one cent coin can be used as a medium of exchange and on December 31, the one cent coin will cease to be legal tender. So [today] vendors and businesses should not accept the one cent coin.”

When the Central Bank announced the demonetization of the penny last year, it anticipated that at least 215 million coins out in circulation would be redeemed.

Campbell said it doesn’t seem the bank will reach that target.

“We expected conservatively to collect about 215 million pennies. We’re at 25 million so I don’t know if we’ll actually reach that number. We still haven’t gone into the Family Islands as yet, we’ll get to them during the first quarter of 2021, so there’s still some collection there. But we’re a ways off and I don’t know if we’ll see those numbers,” he said.

CBOB made the decision to ax the penny after studying the cost of producing the coin versus its actual value. The bank found that it cost $443,000 to distribute the one cent coin and that it could save $7 million over ten years through its elimination.

The last time pennies were manufactured was in 2015.

The bank explained that the removal of the coin will not have an effect on electronic payments, while cash payments will be rounded off to the nearest five cents.

Campbell said while some challenges remain, businesses for the most part are prepared to embrace the new rounding off method for payments.

“There were some businesses that were already implementing the rounding in anticipation of the demonetization. There were some businesses that have already adjusted their POS systems. But there still were some concerns from retailers regarding some challenges in how it would affect the process. We published a frequently asked questions list for businesses just to try and provide some assistance along the way,” he said.

Business must now round the total amount due to the nearest five cents.

For example, if a total bill is $9.42 or $9.41, the nearest five cents to either of these would be $9.40.

If a total bill is $9.43 or $9.44, the nearest five cents to either of these would be $9.45.

Pennies may be redeemed at any commercial bank, credit union or any post office branch in the Family Islands.