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7/28/2019 Types of Money in Romania
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Page 1 | P o p e s c u I o n u ț - I E B A , a n I
Types of Money in Romania
1. Currency
Romania's currency is the leu (usually appears in the plural form lei). It comes in Polymer
notes 1 (green) 5 (purple) 10 (Reddish Brown) 50 (Yellow) 100 )Blue) (200 and 500 lei notes arerarely used).
The leu's subdivison is the ban (plural form bani), 1 leu = 100 bani), which comes in 1
(brass), 5 (cooper) 10 (steel) and 50 (brass) bani coins.
Euros are often accepted (especially for larger and legal transactions and you may
frequently see prices quoted in euros e.g. for Houses and Land)) other Foreign currencies are
usually not accepted; some hotels and tourist shops do take major international currencies (Euros,
GBP CHF DKK SEK NOK USD etc.), but the exchange rates they offer are frequently lower
than the normal rates.
2. Exchanging money
If you want to change some money, the primary option is to use ATMs. Using ATM cards is
very convenient and safe. You get a better exchange rate at exchange offices but take care as
some (very rare) charge a % which subtract from value received (just look for word COMISION
which have to be 0%). Prior to make the exchange they have to give you a receipt which you
have to sign so if anything is fishy you may say you don't want to exchange anymore, just ask for
you money and leave. The big advantage of using ATM machines is that they eliminate the need
to carry large amounts of cash as traveller's checks are virtually useless in shops.
Surprisingly, currencies from bordering countries are hard to exchange and not used - even from
romanian speaking Moldova! (you'll be lucky to get 50%) - Ukrainian Grivna and Serbian Dinar
are difficult, even Bulgarian Leva and Hungarian Forints will "lose" you 30% unless you change
at the border.
If you use exchange offices always check the commision percentage, usually it is zero
except in the airport.
The ATM works fine and you can find them almost in all big shops locations, sometimes
near public institutions and ofcourse at banks external wall. Also the big shops accept Visa and
Mastercard.
If you're in Bucharest your best place to shop for exchange rates is Calea Mosilor(pron.
Moshilor) near Bucur Obor. Many good exchange bureaus there. Just check there is 0%commission, and read carefully the exchange rate for your specific amount of money and don't
mismatch with traveler checks rates. If you feel unsure, write down on a piece of paper both the
amount of money you have and the exchange rate, and show it to the clerk. The nastiest trick
(perfectly legal) is to offer a very good rate for big amounts of money and a much lower one for
small sums, written in tiny fonts. Careless customers pay dearly for their mistake. Never accept
unregistered transactions, always ask for your receipt. You have to hand the clerk your passport
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or another ID with photograph. Check exchanged money inside the premises, in front of the
clerk.
If you do plan on exchanging cash be sure you have brand new bills with no cuts or marks
of any kind on them. Usually exchange houses will not take bills with bank marks or other
markings on them. Even a small tear in a bill and it will be rejected. If you are using Euros or
Pounds be sure you have only the most recent design and coloration on the note.
3. History
a. First leu: 1867-1947
10 bani copper coin, 1867 5 lei coin minted in 1883
On April 22, 1867, a bimetallic currency was adopted, with the leu equal to 5 grams of
83.5% silver or 0.29032 grams of gold.
Before 1878 the silver Russian ruble was valued so highly as to drive the native coins out
of circulation. Consequently, in 1889, Romania unilaterally joined the Latin Monetary Unionand
adopted a gold standard. Silver coins were legal tender only up to 50 lei. All taxes and customs
dues were to be paid in gold and, owing to the small quantities issued from the Romanian mint,
foreign gold coins were current, especially French 20-franc pieces (equal at par to 20 lei), Turkish
gold lire (22.70), old Russian imperials (20.60) and British sovereigns (25.22).
Romania left the gold standard in 1914 and the leu's value fell. The exchange rate was
pegged at 167.20 lei = 1 U.S. Dollar on February 7, 1929, 135.95 lei on November 5, 1936,
204.29 lei on May 18, 1940, and 187.48 Lei on March 31, 1941. During Romania's World War
IIalliance with Nazi Germany, the leu was pegged to the Reichsmark at a rate of 49.50 lei = 1
Reichsmark, falling to 59.5 lei in April 1941. During Soviet occupation, the exchange rate was 1
ruble = 100 lei. After the war, the value of the currency fell dramatically.[4]
b. Second leu: 1947-1952
On August 15, 1947, a revaluation took place, with a new leu replacing the old one at a
rate of 20,000 old lei = 1 new leu. This revaluation, called a monetary reform or stabilisation
measure (mica stabilizare, marea stabilizare), was carried out by the Communist authorities with
absolutely no advance warning and without the possibility to exchange more than a fixed amount
of money for the new currency. This was done in order to depose the former middle and upper
classes of their last assets, after nationalization, to prepare for collectivization and to finalize the
installation of communism. At the time of its introduction, 150 new lei equalled 1 U.S. dollar.
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c. Third leu (ROL): 1952-2005
A 10 lei banknote issued in 1966
On January 28, 1952, another new leu was
introduced. Unlike the previous revaluation, different rates were employed for different kinds of
exchange (cash, bank deposits, debts etc.) and different amounts. These rates ranged from 20 to
400 "old lei" for 1 "new" leu. Again, no advance warning was given before the reform took place.
During the communist era, the gold standard was dropped after requiring severe
adjustments to prevent inflation following the revaluations. After the gold standard was dropped,
the leu lost convertibility and, between 1970 and 1989, the official exchange rate was fixed by
the government through law. This exchange rate was used by the government to calculate the
value of foreign trade, but foreign currency was not available to be bought and sold by private
individuals. Owning or attempting to buy or sell foreign currency was a criminal offence,
punishable with a prison sentence that could go up to 10 years (depending on the amount of
foreign currency found under one's possession). International trade was therefore considered as part of another economic circuit than domestic trade, and given greater priority. This inflexibility
and the existence of surplus money due to constant economic decline in the 1980s, mixed with
the need for more foreign currency and the refusal of the Ceauşescu regime to accept inflation as
a phenomenon in order to attain convertibility, led to one of the greatest supply side crises in
Romanian history, culminating with the introduction of partial food rationing in 1980 and
full rationing for all basic foods in 1986/87. This was a major factor in growing discontent with
Ceauşescu, and contributed in part to the fall of the Communist regime in 1989.
In the 1990s, after the downfall of communism, inflation ran high due to reform failures,
the legalization of owning foreign currency in 1990, and the
bankrupt policies of the former communist era, reaching rates as
high as 300% per year in 1993. By September 2003, one euro was
exchanged for more than 40,000 lei, this being its peak value.
Following a number of successful monetary policies in the late
1990s and early 2000s, the situation became gradually more stable,
with one digit inflation in 2005.
The Romanian leu was briefly the world's least valued
currency unit,[5]
from January (when the Turkish lira dropped six
zeros) to July 2005. However, the 1,000,000 lei bill was not the highest Romanian denomination
ever. This distinction belongs to the 5 million lei bill from 1947.
d. Fourth leu (LEU): 2005-Present
As of late 2008, some price tags still showed the cost
of items in both ROL and RON
On 1 July 2005, the leu was revalued at the rate of
10,000 "old" lei (ROL) for one "new" leu (RON), thus psychologically bringing the purchasing
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power of the leu back in line with those of other major Western currencies. The term chosen for
the action was "denominare", similar to the English "denomination", to signify not a conversion,
but rather a total reinvention.
The first day brought difficulties adjusting to the new paper currencies and closed ATMs
(that needed reprogramming) and forcing a new calculation habit that slowed down shops and
annoyed some sales staff and older shoppers. The old ROL currency banknotes remained incirculation until December 31, 2006 (coins remained in circulation only until December 31,
2005), but all accounts have been converted starting July 1, 2005. There is no conversion time
limit between the currencies. Retailers had to display prices in both old and new currency from
March 1, 2005 until June 30, 2006. The appreciation of the leu during 2005 was about 20%
against a basket of major currencies.
As of 2006, the revaluation is a potential source of confusion, especially to visitors, since both
old and new currency values are commonly quoted. When written, the very large amounts in old
currency are usually obvious, but in speaking inhabitants might refer to an amount of 5 new lei as
simply "fifty" in reference to its value of 50,000 old lei.
4. Coins
a. First leu
In 1867, copper 1, 2, 5 and 10 bani were issued, with gold 20 lei (known as poli after the
French Napoleons) first minted the next year. These were followed, between 1870 and 1873, by
silver 50 bani, 1 and 2 lei. Silver 5 lei were added in 1880. Uniquely, the 1867 issue used the
denomination 1 banu rather than 1 ban.
In 1900, cupro-nickel 5, 10 and 20 bani coins were introduced, with holed versions
following in 1905. The production of coins ceased in 1914, recommencing in 1921 withaluminium 25 and 50 bani pieces. Cupro-nickel 1 and 2 lei coins were introduced in 1924,
followed by nickel brass 5, 10 and 20 lei in 1930. In 1932, silver 100 lei coins were issued.
However, inflation meant that, in 1935, smaller silver 250 lei coins were introduced with nickel
100 lei coins being issued in 1936, followed by nickel 50 lei in 1937.
In 1941 and 1942, zinc 2, 5 and 20 lei coins were introduced,
together with silver 200 and 500 lei. Nickel-clad-steel 100 lei
followed in 1943, with brass 200 and 500 lei issued in 1945. In 1946
and 1947, a new coinage was issued consisting of aluminium 500
lei, brass 2000 and 10,000 lei, and silver 25,000 and 100,000 lei.
b. Second leu
In 1947, coins were issued before the overthrow of
King Michael I, in denominations of 50 bani, 1, 2 and 5 lei. After
the creation of the People's Republic, new coins were issued
between 1948 and 1952, in denominations of 1, 2, 5 and 20 lei.
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c. Third leu
In 1952, coins were introduced in denominations of 1,
3, 5, 10 and 25 bani, with the 1, 3 and 5 struck in aluminium
bronze and the others in cupro-nickel. In 1955, cupro-nickel 50
bani were added.
In 1960, a new coinage was introduced, consisting of 15 and25 bani, with 5 bani, 1 and 3 lei coins added in 1963. All were
struck in nickel-clad steel. In 1975, aluminium replaced steel
in the 5 and 15 bani, with the same change happening for the
25 bani in 1982. Aluminium 5 lei were introduced in 1978.
As inflation took its toll, 500, 1,000 and 5,000 lei coins
were introduced in 1999, 2000 and 2001, respectively, and
were the only coins circulating when the revaluation occurred.
They were all criticized for being clumsy and difficult to use.
The 500 lei coins were very thick (about 0.3 cm). Despite their small value, it took only a handful of such coins to fill one's
pocket. They were also made of poor material and could be
occasionally found with bite marks. The 1000 lei coin was
considered too small and was also cheaply made, and the 5000
lei coin was not circular (it was a dodecagon). This made it
awkward to handle and difficult to use in slot machines, where
it was frequently the only coin accepted. The 500, 1,000 and
5,000 lei coins became worth 5, 10 and 50 bani with the
revaluation. d. Fourth leu
The 1 ban coin is rare and not in demand by either
banks or retailers. Supermarkets however continue to advertise
prices such as 9.99.[7]
In practice, retailers almost always round
to the nearest 5 bani and recently to 10 bani.
5. Banknotes
a. First leu
In 1877, state notes were introduced in denominations
of 5, 10, 20, 50, 100 and 500 lei. In 1880, these notes were
overstamped for issue by the Banca Națională a României,
which began to issue regular notes in 1881 in denominations of
20, 100 and 1000 lei.
In 1914, 5 lei notes were reintroduced, followed by 1 and 2 lei
notes in 1915 and 500 lei in 1916. The Ministry of Finance
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issued very small sized notes for 10, 25 and 50 bani in 1917.
500 lei notes were introduced in 1940, followed by 10,000
and 100,000 lei in 1945 and 1 and 5 million lei in 1947. In
1945, the Ministry of Finance issued 20 and 100 lei notes to
replace those of the National Bank's.
b. Second leu
In 1947, the Ministry of Finance introduced 20 lei
notes and Banca Naţională a României introduced 100, 500
and 1000 lei notes. In 1949, Banca Republicii Populare
Române took over the production of paper money and
issued 500 and 1000 lei notes.
c. Third leu
In 1952, the Ministry of Finance introduced notes for
1, 3 and 5 lei, and the Banca Republicii Populare
Române introduced 10, 25 and 100 lei notes. In 1966, the
Banca Națională a Republicii Socialiste România took over
the production of all paper money, issuing notes for 1, 3, 5,
10, 25, 50 and 100 lei.
In 1991, 500 and 1000 lei notes were introduced, followed
by 200 and 5000 lei notes in 1992, 10,000 lei in 1994,
50,000 lei in 1996, 100,000 lei in 1998, 500,000 lei in 2000
and 1 million lei in 2003. There was also a 2,000 lei
note introduced in 1999; it celebrated the total solar eclipse that occurred on August 11, 1999. The final issues of the 2000, 10,000, 50,000, 100,000,
500,000 and 1 million lei were polymer notes.
Notes in circulation at the revaluation were:
10,000 lei (became 1 leu)
50,000 lei (became 5 lei)
100,000 lei (became 10 lei)
500,000 lei (became 50 lei)
1,000,000 lei (became 100 lei)
d. Fourth leu
In 2005, polymer notes were introduced for 1, 5, 10, 50, 100 and 500 lei. 200 lei notes
were added in 2006. The designs of the 1, 5, 10, 50 and 100 lei notes are based on those of the
earlier 10,000, 50,000, 100,000, 500,000 and 1 million lei notes which they replaced. The 10 lei
bill was redesigned in November 2008 (most of the graphic elements are identical, some of the
safety elements were changed, making its safety features similar to the lower values of 1 leu and
5 lei notes).