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Romanian Leu

The leu (code RON) is the currency ofRomania. It is subdivided into 100 bani. The name of the currency means

"lion". On 1 July 2005, Romania underwent a currency reform, switching from the previous leu (ROL) to a new

leu (RON). 1 RON is equal to 10,000 ROL.

Romania joined the European Union on 1 January 2007 and it is expected to adopt the euro in 2015.

Firstleu

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 Union and 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 II alliance with Nazi Germany, the leu was pegged tothe 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.

Secondleu

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 ofcommunism. At the time of its introduction, 150 new lei

equalled 1 U.S. dollar.

Thirdleu (ROL)

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 foreigncurrency 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 very unpopular Ceauescu 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 food rationing starting 1986/87 (actually the food rationing was introduced in the summer of

1980 - however it was extended to absolutely all basic foods only a few years later. The introduction of food

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rationing was carried on at different times in different regions ), and partly triggering the downfall of

communism.

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 briefly held the dubious distinction of being the world's least valued currency unit,[4] 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.

Fourthleu (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 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 in circulation until December 31, 2006 (coinsremained 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.

Future: Euro

The euro is expected to replace the leu on 1 January 2015.

- The worst thing about global currency is the same as the worst thing about a truly global food supply or

energy supply. You have what is known as a single point of failure. If the one currency crashes then

everything crashes. At present, if the dollar crashes then gold or the Yuan or the Yen could conceivably

pick up the slack.

If you want a totalitarian dictatorship wherein a small group of people have control over the whole

world, then a one world global currency is a good thing. That's way Communists and Marxist want one

currency--one ring to rule them all.

If you had one currency then there would be no exchange rates to worry about. In theory the money

supply could be regulated to control inflation.

Again if you are are Marxist or Communist, it would be easier to divert the money from people who

earned it to people who don't work and don't intend to.

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- Advantages if you consider it as advantage would be money would flow from country to country easily.

The disadvantages would be idiots in other countries who might not be as smart or as cautious as your

people and might crash your economy. Cassano in AIG and Mozzilo in Countrywide Corp that is in the

news for example. Also bad leadership in government greenspan wolfwitz . Thats why the euro was a

bad idea from it's inception. USA is run by crooks. Ever since world war 2 these guys have been gaining

control. Problem is people in other countries think usa is the same place it was in the 1950s. If the knew

the truth they wouldn't invest 2 cents.

- Nice thought...

but this doesnt make any sense and if multiple countires across the globe somehow agreed to this there

would be a lot of chaos.

And being able to adjust the currency toward different countries will be crazy.

what happens when our minimum wage is 10 dollars/hr and in another country people get paid 75 cents

a day. being the same currency it just wouldn't make sense. world leaders would hate it.

not only that, but currency is a big nationalism thing. see how america has presidents on it and pounds

have that queen on it? I think canada has beavers or something. but anyway. it wont work.

Pro: Eliminate Risky Many countries face the risk of suffering catastrophic consequences if their currency is devalued and their

money is suddenly less valuable on the world market. The use of a single global currency would eliminate this

risk.

Pro: Eliminate Transaction Costs

y A single global currency would also have the effect of eliminating the transaction costs incurred in the course of

exchanging different kinds of money. According to the Single Global Currency Association, these costs total as

much as $1 trillion per year.

Pro: No More International Reserves

y Many industrialized countries stock large reserves of several kinds of foreign currency, both to finance trade and

to help hedge against devaluation. This stockpiling of currencies would no longer be necessary if all currency

was the same.

Pro: Reduced Asset Fluctuation

y The value of assets within a particular country are in perpetual flux as the price of the currency used to value

them shifts through trades on the global market. A move to an international currency would keep asset prices

stable.

Con: Fewer Ways To Adjust Monetary Policy

y National currencies allow central banks to adjust domestic monetary policies by increasing or decreasing a

country's money supply, the amount of currency in circulation. The adoption of an international currency would

make such adjustments to the needs of a particular country impossible.

Con: Governance

y Any international currency would require an institution or group to make decisions related to its administration.

While only 16 countries have adopted the Euro as of 2010, there are almost 200 sovereign nations in the world,

all of whom would be using an international currency. This would risk making the process by which decisions areformulated very complicated.

Con: Loss Of Control

y By agreeing to take on a national currency, countries would be relinquishing a great deal of control related to

monetary policy, as well as inflation. The fates of the economies of industrialized nations would be tied to those

of Third World nations, potentially increasing international economic instability.

Con: National Identity

y A country's currency can also be a source of national pride and identity. Many currencies feature the faces of

historic figures, artists or politicians. The institution of a global currency would eliminate this aspect of the

national culture.

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