Romanian leu

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(Redirected from ROL)

The leu (Template:IPA, plural: lei Template:IPA; ISO 4217 code RON; numeric code 946) is the national currency of Romania. One leu is subdivided into 100 bani (singular: ban). Starting on 1 July 2005, Romania has undergone a currency reform, from ROL to RON, both called lei. 1 RON = 10,000 ROL.

The acronyms stand for "ROmanian Leu", and "ROmanian New Leu". The current RON acronym for the currency might sound potentially obsolete in the future, but Romania is expecting to join the European Union and switch to euro long before any other currency reform might be needed.

While Moldova was a province of Romania (1918-1940), the Romanian leu circulated in that area. Following the collapse of the Soviet Union and the creation of the independent Republic of Moldova in 1993, the Moldovan leu, named after its Romanian predecessor, was established.

1 Etymology
2 History
3 Exchange rate
4 Legal tender
5 See also
6 External links

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Etymology

During the 17th century, Dutch thalers bearing a lion (leeuwendaalder) circulated in the Romanian principalities; they were often called lei (lions). The name was kept as a generic term for money, and became the official name of the national currency in 1880 after several attempts to impose a more nationalist name, such as Român (cf. Franc) or Românat (cf. Ducat). The Bulgarian lev has the same etymology.

The subdivision of Leu, the "Ban" is derived from Ban, the title held by some medieval rulers who also minted their own coins, hence the generic meaning of bani ("money" in Romanian).

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History

Image:1883 5lei Romania.jpg

In 1867, a bimetallic currency was adopted, the leu of 100 bani. After 1878 the silver Russian ruble was valued so highly as to drive the native coins out of circulation. Consequently, in 1889, Romania joined the Latin Monetary Union and adopted a gold standard. Bronze coins of 1, 2, 5 and 10 bani, silver coins of ½, 1, 2 and 5 lei and gold coins of 5, 10 and 20 lei were used. Silver was 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 of (25.22). Nickel pieces worth 5, 10 and 20 bani were authorized by a law of 1900.

After World War II, the leu suffered heavy depreciation, and was reevaluated in 1947 and 1952. The first was carried out at a single rate of 1 "new" leu for 20,000 "old" lei. The second, however, employed different rates 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. Both revaluations, called monetary reforms or stabilisation measures (mica stabilizare, marea stabilizare), were done 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.

Image:10 lei 1966.jpg

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 all convertibility and, between 1970 and 1989, there was no official exchange rate between the leu and foreign currencies, other than a useless, fixed, and over-valuated rate given through law by the government as propaganda. In fact, lei could not be legally exchanged for any other currency and, owning or attempting to buy or sell foreign currency was a criminal offence, punished with up to 10 years in prison. 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 Ceauşescu regime to accept inflation as a phenomenon in order to attain convertibility, led to one of the greatest supply side crisis in Romanian history, culminating with the introduction of food rationing starting 1986/1987, and partly triggering the downfall of communism.

Image:RON-100ronav.jpg Image:1 million lei front.jpg

In the 1990s, after the downfall of communism, inflation ran high due to reform failures, the legalisation 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.

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 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 salespeople and shoppers. The old ROL currency remains in circulation until January 1, 2007, but all accounts have been converted starting July 1 2005. There is no conversion time limit between the currencies.

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Exchange rate

As of 15 April 2006 the approximate exchange rate was: € 1 = 3.495 lei; US$ 1 = 2.887 lei; £ 1 = 5.057 lei. (Source: the Financial Info webpage at the website of the National Bank of Romania)

The appreciation of the leu during 2005 was about 20% against a basket of major currencies.

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Legal tender

As of July 2005, the following notes and coins are in circulation:

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Coins

The RON coins are made of nickel, with a very simple, identical design (obverse : the nominal value, reverse : the coat of arms of Romania, the text Romania and the year of issue). Each has a different color:

1 ban - 16.75 mm diameter, yellow : very small supply due to extremely low value, not issued in first wave
5 bani - 18.25 mm diameter, red
10 bani - 20.50 mm diameter, white
50 bani - 23.75 mm diameter, light yellow

All coins are round in shape.

Old ROL coins were made of different materials, depending on value. Those actually used (500 lei, 1000 lei and 5000 lei) were made of aluminum, each facing criticism in the past: the 500 lei coins were very thick (about 0.5 cm). Five of such coins could fill one's pocket, even though they had a very small value, and were made of poor material (some coming with bite marks), the 1000 lei coin was too small, while also made of poor material, and the 5000 lei coin was not circular (it was a dodecagon), facing problems with slot machines (it was the only one used in these), and having a rather uncomfortable handling.

New RON coins also face criticism. Their size and very simple design make the coins hard to distinguish for the visually impaired. The quality of the materials used is also questionable, with coins becoming oxidized and dark within weeks from the initial release.

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Banknotes

The leu notes issued on 1 July 2005 are similar in size to euro notes, so that machines will need less refitting in the case Romania decides to join the euro zone. This decision was taken after a lot of debate, and with some opposition, the initial decision being to make them even smaller, similar to the 1966. The old leu notes are rather long and fairly uncomfortable to carry.

The design of the notes follows some common guidelines: the obverse shows a flower native to Romania and the portrait of a Romanian cultural personality; the reverse shows a building or a well-known monument. All banknotes are printed on plastic polymer, each in its own colour theme (light green for 1 leu, light purple for 5 lei, light pink and light orange for 10 lei, yellow for 50 lei, blue for 100 lei, light blue for 500 lei).

Each banknote also features a small transparent window, in the shape of a distinctive item characterising the activity of the pictured personality, a heraldic symbol for Nicolae Iorga, a music key for George Enesco, painting implements for Nicolae Grigorescu, an eagle for flying pioneer Aurel Vlaicu, theater masks for Ion Luca Caragiale and an hourglass symbolising poetry and time for Mihai Eminescu. Each banknote has a different texture, to be easily recognised in the pocket or by those with visual impairments.

Value	Obverse portrait	Obverse flower	Reverse	Note
1 leu	Nicolae Iorga, historian	Milkweed gentian	Cathedral of Curtea de Argeş	same design as the old 10 000 lei note
5 lei	George Enescu, composer	Carnation	Romanian Athenaeum	same design as the old 50 000 lei note
10 lei	Nicolae Grigorescu, painter	Marshmallow	traditional house from Oltenia	same design as the old 100 000 lei note
50 lei	Aurel Vlaicu, engineer	Edelweiss	Vlaicu II airplane design	same design as the old 500 000 lei note
100 lei	Ion Luca Caragiale, playwright	Sweet violet	National Theatre of Bucharest (old building)	same design as the old 1 000 000 lei note
200 lei	Lucian Blaga, philosopher, poet	?	A watermill and the Hamangia Thinker	to be issued in December 2006
500 lei	Mihai Eminescu, poet	Tilia	University Library of Iaşi

Issuing 100 and 500 lei bill was very controversial, as they are of high value, 500 lei being about 167 US$, these bills are not issued by ATM machines (many ATMs do not allow transactions larger than 300 lei). The 1,000,000 lei bill, after 2 years, is still largely unused, as over 30% will leave the bank reserves for the first time only to be destroyed, in the wake of the new leu.

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Revaluation

The coins and notes in circulation on June 30 2005, before the revaluation (denominare), are also legal tender until December 31 2006. These are:

coins: 500 lei (became 5 bani), 1000 lei (became 10 bani), 5000 lei (became 50 bani)
notes: 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). Awkward enough, the term chosen for the action was "denominare", similar to the English "denomination", to signify not a conversion, but rather total reinvention.

Retailers must display prices in both old and new currency from March 1 2005 until June 30 2006.

The Romanian leu briefly held the dubious distinction of being the world's least valued currency unit, from January (when the Turkish lira dropped six zeros) to July 2005. However, the 1,000,000 lei was not the highest Romanian denomination ever. This distinction belongs to the 1947 5 million lei bill.

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Historic banknotes (1990-2005)

Value	Year	Obverse	Reverse
500 Lei	1991	Constantin Brâncuşi	Sculptures of Brâncuşi
200 Lei	1992	Grigore Antipa	Danube Delta
500 Lei	1992	Constantin Brâncuşi	Sculptures of Brâncuşi
1,000 Lei	1991,1993,	Mihai Eminescu	Putna Monastery
5,000 Lei	1992,1993,	Avram Iancu	Densuş Church, Dacian Draco, Gate of Alba Iulia
10,000 Lei	1994	Nicolae Iorga	Şuţu Palace
50,000 Lei	1996	George Enescu	The sphinx of Bucegi Mountains
1,000 Lei	1998	Mihai Eminescu	Ruins of Histria, Linden tree flowers
5,000 Lei	1998	Lucian Blaga	Crucifix
100,000 Lei	1998	Nicolae Grigorescu	Rodica - Picture of Nicolae Grigorescu
2,000 Lei	1999	1999 Sun eclipse	Map of Romania
10,000 Lei	1999	Nicolae Iorga	Cathedral of Curtea de Argeş
10,000 Lei	2000	Nicolae Iorga	Cathedral of Curtea de Argeş
50,000 Lei	2000	George Enescu	The sphinx of Bucegi Mountains
500,000 Lei	2000	Aurel Vlaicu	The plane intented by Aurel Vlaicu
50,000 Lei	2001	George Enescu	The Athenaeum from Bucharest
100,000 Lei	1998	Nicolae Grigorescu	Rodica - Picture of Nicolae Grigorescu
1,000.000 Lei	2003	Ion Luca Caragiale	The National Theatre from Bucharest

The 2,000 lei bill and the 500 lei "special edition" coin were made in order to celebrate the 1999 total solar eclipse. Whereas the 500 lei coin is currently very rare, albeit still in circulation, becoming a prized collector's item, the 2000 lei bill was hugely popular, being taken out of circulation in 2004 (a long time after the 1,000 and 5,000 lei bills were replaced by coins).

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