Balboa returns to Panama

lunes, 17 de enero de 2011

Panamanian authorities have confirmed that prepare Balboa coinage, the national currency to circulate alongside the U.S. dollar. The head of the Procurement and Contracting Unit, Ministry of Economy and Finance, José Ramón Fernández, said the project foresees the designation coinage of one and two Dollars.

The proposal supports the circulation of coins with the same nominal value of the dollar to reduce costs by managing the foreign currency as legal tender in Panama since 1904, has served the international banking system development.

Today, Panama coins minted 50, 25, 10, five cents and a penny for the same weight and size of its U.S. peers, but not until now that boom takes the initiative to be put into circulation the balboa.

Early Dollars printed on paper or metal wedged circular stopped decades ago, when the Panamanian economy was still small and became overwhelming presence of the dollar. Fernández predicted that "all banks established in Panama accepted the new balboa and use it with the same nominal value of the U.S. dollar without restriction, as it is done with free circulation coins.

Some people consulted by the page Amé considered that this is an unrealistic step and do not opt for replacement. Gustavo Chacin, V Finance invesment, receurda that Panama has no central bank and that "the replacement of the dollar is not viable. It would be suicide for the country because you do not.The debt is dollarized, so that replacement by balboa no sense. "

Chacin believes this is an issue returns to the debate every so often. "It's a nationalistic debate meaningless, he said. The dollar came into force in Panama when Panama's economy was still small and it was overwhelming presence of the dollar. At present, the country's economy reached 20,000 million dollars of GDP, which, according Chacin, remains low.

Minister Fernandez said that the Panamanian government to the United States pays a high cost for the return of damaged notes, and they have a lifespan of nine months to a year ago. Panama added that the dollar it costs to acquire the United States. However, to circulate the U.S. dollar in Panama, Mexico, through the National Bank of Panama to purchase face value in its various denominations, and must bear all freight and insurance costs implicit in the import operation themselves.

The same occurs with the U.S. dollar coins because they are the owners of the right of the perceived usefulness of the cost of minting the coin and the face or nominal value that represents the same, which is known as seigniorage .

Panama only get seigniorage in national currencies are balboa Dollars or fractions, ie when the service contract coinage minting a house.

In that sense, Panama only benefits from seigniorage (which can be very significant in currencies like one or two Dollars and it is planned), when asked to mint its own coins to a mint instead of importing all euro notes and coins from the United States of America, and give all this utility to the U.S. government.