LATROBE UNIVERSITY

HOMEWORK WEEK 1
GROUP 3: Le Tuan Hung
Le Ha My
Nguyen Tran Hoan
Le Quang Hieu
________________________________________________________
Question: Find a successful product of Vietnam in the past, but no longer available
at now. Identify and explain.

Metal coin is one of set of asset that has the highest liquidity to be exchanged for
goods and services in order to satisfy the demand. In 2003, metal coins were issued
by the government of Vietnam to meet the demand of cash flow. After 8 years,
however, the metal coins were withdrawn from financial markets. According to the
leader of the Reserve Bank at the time, metal coins were issued for the purpose of
perfecting the structure of the face value of the metal coins in circulation. Until this
time, the metal coins almost defunct and no longer use the actual value. According
to research, not only in Hanoi, but also other locals, metal coin transactions almost
absent.
The disappearance of metal coins lead to a question that why metal coins are no
longer to be released in Vietnam. Although metal coins had been so prevalent in

the first year released, it has encountered the problems of the convenience, cost and
value of money.
To begin with, the convenience is the first reason that explaining why metal coins
were absented. In the society, the convenience of consumer is something that
people particularly interested. Consumption habits of the people are still using the
paper money which is easy to use and easy to take; meanwhile, both the form and
the quality of metal coins is very cumbersome and unsatisfactory. Thus, it could
not satisfied the consumer expectations in the time.
The second reason comes from the cost to release metal coin. The cost to release
one metal coin as equal as the par value of this coin, sometimes it is more
expensive because of the storage costs and distribution costs are too costly. From
2003 to 2005, the Reserve Bank released a few billion coins face value, accounted
for total value of money in the market. However, the number of coins which
were not consumed, waste budget government.
The next important reason is that value of currency in Vietnam in 20 years has
continually devalued. Now, to be able to buy a certain item, also must calculate the
value of 10,000 VND or more; meanwhile metal coins only defined with value of
200 VND, 1,000 VND or 5,000 VND, so the coin is no longer pragmatic value.
* Source Reference:
Le Thuy, .2015, Should or should not use the metal coin?, [online]. Available at:
URL: http://cand.com.vn/doi-song/Tien-xu-bo-thi-thuong-vuong-thi-toi-338955/
(Accessed 21 January 2015)