Decimalisation
From Free net encyclopedia
- This is about units of currency. For other conversions to decimal systems, see decimalization (disambiguation).
In the management of currencies, decimalisation (or decimalization) is the process of converting from traditional denominations to a "decimal" system, usually with two units differing by a factor of one hundred.
The logical appeal of decimalisation in general has generally been effective much sooner as to currency than as to physical measurements, and few countries have coupled the two processes.
All countries that had non-decimal currencies have decimalised, at least in practice.
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Formal decimalisations
Russia was the first country to decimalize its currency. In 1710, Peter the Great set the ruble equal to 100 kopecks in a series of reforms to modernize Russia.
The United States introduced decimal currency with the dollar in 1792 (adopting only the currency aspects of a more comprehensive decimal system of measurements proposed by Thomas Jefferson).
In France, decimalisation of the coinage was accompanied by metrication of other measures, introducing the franc in 1803 to replace the Livre tournois, abolished during the Revolution.
France imposed decimalisation on a number of countries that it occupied during the Napoleonic period.
Later in the century, Canada converted to decimal coinage in 1859, and Sri Lanka (formerly Ceylon) in 1869.
India changed from the Rupee, Anna, Pie system to decimal currency in 1957. Pakistan followed in 1961.
South Africa decimalised in 1961, introducing the rand as the new unit of currency. When Australia decimalised in 1966, the new Australian dollar was fixed at ten shillings (i.e. half an Australian pound). A similar strategy was followed in New Zealand in 1967, with the introduction of the New Zealand dollar.
The United Kingdom and the Republic of Ireland decimalised the Pound Sterling and the Irish pound on Decimal Day, 15 February 1971.
Malta decimalised its currency in 1972.
(In the special context of stating the prices of stocks, traded almost always in blocks of one hundred or more shares and usually in blocks of many thousands, stock exchanges in the U.S. used eighths or sixteenths of dollars, until converting to decimals between 2000 and 2001.)
De facto decimalisation
Mauritania and Madagascar theoretically retain currencies with units whose values are in the ratio five to one: the Mauritanian Ouguiya is equivalent to five khoums, and the Malagasy ariary (MGA) to five iriambilanja.
In practice, however, the value of each of these four units is quite small: as of 2005, one MRO is traded against the Euro at about 330 to the Euro, and one MGA at about 2300 to the Euro. In each of these countries, the smaller denomination has fallen out of use.
Decimalisation experience and introduction of the Euro
Before the introduction of physical Euro notes and coins on 1 January 2002, the plans and experiences of various decimalisations, particularly decimalisation in the United Kingdom in 1971, were studied by the European Central Bank because many of the lessons could be learnt and applied to the introduction of the Euro. For example, on how to educate the public (particularly the elderly), how long the transition was likely to take, the likely speed of uptake of the new currency, the likely effects on inflation for those currencies where a 1 euro cent was larger than the smallest coin in circulation before the transition and the likely criminal activities which might be attempted during the transition period.
See also
External links
- Plan for establishing uniformity in the Coinage, Weights, and Measures of the United States - text of a report to the U.S. House of Representatives by Thomas Jefferson.it:Decimalizzazione