The Bank of Israel asks the government to approve abolishing the 5 agorot coin as legal tender

16.7.07
 
The Bank of Israel asks the government to approve abolishing the 5 agorot coin as legal tender
 
For many years now, the use of the 5 agorot coin has continually fallen. A survey conducted by the Dahaf institute showed that some 80 percent of the public support the cancellation of the 5 agorot coin as legal tender. Further studies among those companies that regularly deal in cash gave the impression that the public are reluctant to accept the coin as change. Also, many vendor machines and parking meters do not accept the 5 agorot coin.
Today, with the sharp rise in the price of metal, the cost of minting the 5 agorot coin has risen to 16 agorot. The increasing expense of producing the coin has led the Bank of Israel to search for alternative metals that will reduce the cost of minting. However, the cheapest suitable metal found, with a different color to that of the current coin, would bring the cost of minting down to only 6 agorot, and that against a background of continually rising metal prices. The rise in metal prices raises the fear that the gap between the face value of the coin and its worth as metal would lead to the coin being melted down for its metal value.
Following the cancellation of the coin as legal tender, the Bank of Israel clarifies that according to the Bank of Israel Law, the nearest legal tender to which prices would be rounded up or down would be the 10 agorot coin. Cancelling the 5 agorot coin therefore would require amounts to be paid in cash ending in 1–4 agorot to be rounded down to the nearest 10 agorot, while amounts to be paid in cash ending in 5–9 agorot would be rounded up.
If the change is approved by the government and the Knesset Finance Committee, the Governor of the Bank of Israel will issue an order to cancel the 5 agorot coin as legal tender, and the cancellation will become effective after a one-year transition period. The expected annual saving from cancelling the 5 agorot coin is NIS 1.7 million.