BANK of Jamaica (BOJ) is ramping up its drive to redeem as much as it can of close to $5 billion in coins, most of which it said “is actually lost in circulation”.

The central bank, in its latest coin drive, said there are two billion pieces of coins in issue worth over $9 billion. Just under 50 per cent of that amount was redeemed for reissuing up to May of this year.

“We really want to improve the redemption rates,” Chevanese Morais, division chief for banking & currency operations at Bank of Jamaica told the Jamaica Observer. Morais added that in going after coins that are already in the system, the central bank is also trying to manage the cost of buying new coins.

BOJ declined to say what those costs were but a 2017 release at the time it was demonetising the one cent, ten cent and 25 cent coins — referred to locally as red money — outlined the cost to make the $1, $5 and $10 coins as being less than three dollars each, while the $20 coin costs just under $10 dollars each to produce.

BOJ said in 2017 that with 50 per cent of all coins in demand being for $1 coins to make change, it would keep ordering them — though it cost more than twice the value to make them at $2.30 each — but would review its design and with a view to using less expensive materials to make it. Meanwhile, declining demand for the 10 cent and 25 cent coins, and virtually no demand for the one cent coin, made it an easy decision to yank their production, with each costing between $1.54 and $1.96 to make.

About two per cent of the total coins in circulation, or roughly $180 million worth, are still the 1 one cent, 10 cent and 25 cent coins that were demonetised six years ago in 2018. They can, however, still be returned for notes that are currently legal tender.

For the coins which remain legal tender, the central bank said their redemption has improved since an agreement was reached with GraceKennedy Money Services to collect coins on behalf of BOJ. In 2017, the year before the coin drive started, around one third of coins issued were redeemed by the central bank. Last year that figure was over 50 per cent.

The rest are classified as “lost in circulation”, a term BOJ uses to refer to coins that people save for months, or even years; or those stashed in the corners of living room suites; as well as those thrown away. Collecting as many as possible would see the BOJ saving on reordering coins, after making its last order during the midst of the COVID-19 pandemic.

Driving demand now, the Business Observer was told, are restaurants and toll operators who use the coins to make change for those who choose cash to make payments.

The demand for banknotes continues to increase as well, though at a slower pace. And BOJ said 22 per cent of the old notes still remain in circulation — one year after the new polymer notes were introduced. The central bank has set a timeline of next year July to redeem the cotton notes now in circulation.