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Entries in Currency (4)

Friday
May042012

Canada Says Farewell to the Penny

Ablestock.com/Thinkstock(WINNIPEG, Manitoba) -- In an effort to save the government money, officials in Canada made the decision some time ago to stop making the Canadian penny.  On Friday, the country held a final minting ceremony for the coin, which was part of the Canadian economy since 1858.

During the ceremony, the last of the coins to be minted came down a chute and fell into a glass bowl as witnesses applauded.

Steve Lambert of the Canadian Press says not to worry, though.  The coins will still be around.

"People are being asked to donate their pennies to charity, but in the meantime, they will still continue to use them," Lambert said. "We're going to see pennies for a long time."

Copyright 2012 ABC News Radio

Thursday
Mar292012

Spare Change: Canada to Stop Making Pennies

Ablestock.com/Thinkstock(OTTAWA, Canada) -- Say goodbye to the Canadian penny.

Lawmakers in Canada have decided it makes little sense -- or cents -- to continue making the 1-cent coin. Canada's minister of finance, Jim Flaherty, announced the penny‘s demise during his 2012 budget speech Thursday.

“Pennies take up too much space on our dressers at home. They take up far too much time for small businesses trying to grow and create jobs,” Flaherty said.

He said each penny costs Canadian taxpayers one and a half cents to make.

That’s nothing compared to America’s wallet-whomping coin. According to the U.S. Treasury Department, an American penny costs 2.4 cents to mint.

Flaherty said Canada’s pennies will go out of circulation this fall.

Here in the U.S., the proposed 2013 budget for the Treasury Department already contains a measure that could change the coins Americans are used to finding and flipping. It proposes passing legislation that would give the secretary of the Treasury “flexibility to change the composition of coins to more cost-effective materials.”

In 2008 -- back when the U.S. penny only cost 1.7 cents to make -- then-Treasury Secretary Henry Paulson floated the idea of eliminating the coin, but it did not catch on. So far, the penny has seemed safe here in the States. Mark Weller, executive director of Americans for Common Cents, said that’s not likely to change anytime soon, thanks to high public support for the coin. He also said the U.S. Mint is wrapping up explorations of making pennies -- as well as nickels, dimes and quarters -- more efficiently.

But with Canadians killing off the coin, American lawmakers have to ask themselves, is change a bad thing?

Copyright 2012 ABC News Radio

Monday
Jan232012

Sanctions Push Iranian Currency to Record Lows

iStockphoto/Thinkstock(WASHINGTON) -- Iran’s currency, the rial, has lost 71 percent of its value against the dollar since September, a fact that a senior Treasury Department official said Monday was a direct result of U.S. and international sanctions on Tehran. Monday, the rial dropped 10 percent to reach record lows after the European Union imposed sanctions.

The EU Monday banned oil imports from Iran, and the U.S. Treasury sanctioned Iran’s third-largest bank, the last of five state-owned banks to be sanctioned, and one of Iran’s final lifelines to the international monetary system.

Iran has reacted to the increased pressure with heightened belligerence in the Strait of Hormuz as well as a renewed willingness to engage in nuclear talks.

The Treasury Department official said Monday that Iran had taken some drastic steps to counter the effect of sanctions, including blocking text messages that contain the words “euro” or “dollar.” Sales of Western currencies were banned and plain clothes police roam currency exchange booths searching for violators, the Treasury official said.

According to a senior European diplomat, the EU’s oil ban, combined with decisions by Japan and South Korea to cut back oil purchases from Iran, will have a disastrous effect on Iran’s economy. Together they account for a significant percentage of Iran’s foreign oil sales. Countries like Russia, China and India represent the balance, but not enough to make up for the loss of revenue.

As Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner made clear in their joint statement this morning the aim is clear: to starve Iran’s nuclear program of its major source of funding but cutting off oil revenues.

Given that the United States has yet to even begin implementing tough new sanctions on oil deals through Iran’s Central Bank, the senior Treasury official Monday predicted that Iran’s economic woes were only going to get worse in the near future.

Copyright 2012 ABC News Radio

Tuesday
Oct112011

Will Currency Manipulation Bill Ignite Trade War with China?

ChinaFotoPress/Getty Images(WASHINGTON) -- With the Senate poised to pass legislation Tuesday to coerce China to reevaluate its currency, speculation abounds as to whether the bill is an effective way to deal with China’s currency manipulation.

The bill does not specifically mention China, but it makes it easier for the Treasury Department to label a country’s currency misaligned, allowing it to impose tariffs on Chinese imports to make up for the deflated price.

It has bipartisan support in the Senate, but members of both parties are skeptical of the legislation in the House of Representatives as well as in the White House.

“For the Congress of the United States to pass legislation to force the Chinese to do what is arguably very difficult to do I think is wrong, it’s dangerous,” House Speaker John Boehner said. “You could start a trade war.”

And while President Obama said China has been “gaming the trading system to its advantage,” he cautioned that the Senate bill may violate international trade laws.

“My main concern...is whatever tools we put in place, let’s make sure that these are tools that can actually work, that they’re consistent with our international treaties and obligations,” Obama said.  “I don’t want a situation where we’re just passing laws that are symbolic, knowing that they’re probably not going to be upheld by the World Trade Organization.”

Supporters of the legislation claim that it will pressure China into raising the value of its currency, making American products more competitively priced with Chinese goods, which would increase demand for American exports. This increase in exports would lead to more jobs, particularly manufacturing, which have been disproportionately affected by the recession.

“We can’t force China’s central bank to immediately raise the value of their currency, but we could make the costs of not doing that so high that China has no choice,” said Scott Paul, the executive director of the Alliance for American Manufacturing.

Paul said that in order for America to pull out of the recession, it was “essential” for the United States to pressure China into allowing its currency, known as the yuan, to appreciate.

But opponents of the bill point out that trying to force China to reevaluate its currency could anger the Asian nation and inspire China to retaliate by imposing duties on U.S. imports or slowing the appreciation of its currency.

Copyright 2011 ABC News Radio







ABC News Radio