Malaysia is planning to retire its smallest coin, the one sen, which now costs four times more to produce than its face value, reports said Wednesday.

"Businesses will no longer have to handle the coins or ensure a ready supply, while consumers will also not have to worry about carrying the coins," Domestic Trade and Consumer Affairs Minister Shafie Apdal told the Star newspaper.

"It will be more convenient for both parties," he said.

By April, the government will implement a mechanism for over-the-counter transactions that will be rounded up or down to the nearest five sen, the daily said.

Malaysia's currency is denominated in ringgit and sen -- the Malay language equivalent for cent.

At current rates of 3.33 ringgit to the US dollar, one sen is worth just 0.3 US cents. Thanks to surging copper prices, it now costs about 4.2 sen to produce, the Star said.

Some 4.4 billion of the coins have been minted but 99 percent have disappeared from circulation and are thought to have been lost, it said.

The central bank said the coins would still be legal tender but that once the rounding mechanism was in place it could reduce production of the coin, and then make moves to withdraw it entirely.

No time frame was given for the process of demonetising the sen, which Bank Negara spends 14.0 million ringgit (4.2 million dollars) a year to produce.