September 23, People’s Bank of China issued a 5 yuan commemorative coins. First day of issue, it was snapped up by the public and collectors . Instead of considering how much those commemorative coins can appreciate, people are having a concern of the increasing inflation.

This commemorative coins were issued at a time when the domestic is experiencing a high inflation rate, and this five yuan coins can be used normal currency; many people will it link up with bubble economy. Some people believe that the issue of the commemorative coins is a secret way how the government try to issue more currency therefor the price level is going to skyrocket.

However in my perspective, there is not certain correlation between the issue of commemorative coins and the rising inflation. Generally speaking, having both coins and paper currency is to make payments and changes more convenient, and the purpose of increasing use the coins is mainly to avoid the loss during the high frequent usage of small denomination notes, especially in humid countries. In addition, when experiencing an inflation, prices are generally high, therefore small money like coins are used less frequently. People have low possibilities to carry relatively small currency, so the coin is usually kind of less useful during high inflation .

https://www.youtube.com/watch?v=uz8wXU06PoA