The Central Bank plans to hire a foreign firm to mint 100 million small denomination euro coins to meet the strong demand being fuelled by people hoarding coins.

The Bank said yesterday it had issued a tender for the coins, which will be the first batch minted abroad since the euro was introduced in 2002.

About 1.8 billion coins worth €384 million are in circulation in the Republic. But the Central Bank believes people are hoarding the coins, reducing the amount in common circulation.

A Bank spokeswoman said that its own mint was at capacity, prompting the Bank to issue a tender for an outside contractor to supply the extra coins.

She said there was a tradition of people hoarding coins and the Bank would prefer if people took their coins out of jars and put them back in circulation.

In December, the Bank financed an advertising campaign to persuade people to stop hoarding small change. But frequent complaints from retailers about the scarcity of small denomination coins this year demonstrate that the problem has not gone away.

The Bank is tendering for small denomination coins, which tend to be hoarded for longer than the €1 and €2 coins.

The tender is for 20 million one cent coins, 30 million two cent coins, 20 million five cent coins, 20 million 10 cent coins, and 10 million 20 cents coins.

Mr Dermott Jewell, director of the Consumer's Association, said people were hoarding the small denomination of coins because there wasn't the right pricing structure to use them in Ireland.

"I think there are a huge amount of prices rounded up to the nearest five cents so there isn't much of a need to use the one or two cent coins," he said.

The Bank said it had no plans to phase out the one or two cent coins, which were criticised as being too fiddly by some groups when they were introduced.

"It is not a step that we could take unilaterally as they circulate in all 12 euro-zone countries," a Bank spokesman.