Redenomination

Redenomination is the process of changing the face value of banknotes or coins in circulation. It may be done because inflation has made the currency unit so small that only large denominations of the currency are in circulation. In such cases the name of the currency may change or the original name may be used with a temporary qualifier such as "new". Redenomination may be done for other reasons such as changing over to a new currency such as the Euro or during decimalisation.

Redenomination itself is considered symbolic as it does not have any impact on a country’s exchange rate in relation to other currencies. It may, however, have a psychological impact on the population by suggesting that a period of hyperinflation is over, and is not a reminder of how much inflation has impacted them. The reduction in the number of zeros also improves the image of the country abroad.

Inflation over time is the main cause for the purchasing power of the monetary unit decreasing; but there are a variety of political reasons for the government not reining in inflation or for not redenominating the currency when its value has depreciated significantly. There are some economic and social benefits of redenominating, including improved efficiency in processing routine transactions. Redenomination typically involves the substitution of new banknotes in place of the old ones, which usually cease being legal tender after the end of a short transition period.

Inflation

In general, redenomination is implemented in response to hyperinflation, which progressively increases the nominal prices of products and services, decreasing the real value of the monetary unit in the local market. Over time, prices become excessively large, which can impede routine transactions because of the risk and inconvenience of carrying stacks of bills, or the strain on systems, e.g. automatic teller machines (ATMs), or because human psychology does not handle large numbers well. Authorities may alleviate this problem by redenomination: introducing a new unit that replaces the old unit, with a fixed number of old units being converted to 1 new unit. If inflation is the reason for redenomination, this ratio is much larger than 1, usually a positive integral power of 10 like 100, 1000 or 1 million, and the procedure can be referred to as "cutting zeroes". Recent examples of redenominations, include:

New unit	=	×	Old unit	Year
Argentinian peso	=	10 000	Argentine peso ley	1983
Argentine austral	=	1 000	Argentine peso	1985
New Mozambican metical	=	1 000	old meticais	2006
Second Zimbabwean dollar (ZWN)	=	1 000	ZWD (first dollar)	August 2006
Third Zimbabwean dollar (ZWR)	=	10 000 000 000	ZWN	August 2008
Fourth Zimbabwean dollar (ZWL)	=	1 000 000 000 000	ZWR	February 2009
This table is not exhaustive.

Although the ratio is often a positive integral power of 10 (ie., removing some zeros), sometimes it can be a×10ⁿ where a is a single-digit integer and n is a positive integer. Partial examples include

New unit	=	×	Old unit	Year
German Rentenmark	=	1 000 billion	Papiermark	1923
Chinese gold yuan	=	3 million	old yuan	1948
Chinese "silver" yuan	=	500 million	"gold" yuan	1949
New Taiwan dollar	=	40 000	old dollars	1949
Azerbaijani new manat	=	5 000	old manat	2006
This table is not exhaustive.

Occasionally, the ratio is defined in a way such that the new unit is equal to a hard currency. As a result, the ratio may not be based on an integer. Examples include

New unit	=	×	Old unit	=	Anchor currency	year
Brazilian real	=	2 750	cruzeiros reais	=	United States dollar	1 July 1994
Yugoslav novi dinar	=	10~13 million	1994 dinara	=	Deutsche Mark	24 January 1994
This table is not exhaustive.

In the case of hyperinflation, the ratio can go as high as millions or billions, to a point where scientific notation is used for clarity or long and short scales are mentioned to disambiguate which kind of billion or trillion is meant.

In the case of chronic inflation which is expected to continue, the authorities have a choice between a large redenomination ratio and a small redenomination ratio. If a small ratio is used, another redenomination may soon be required, which will entail costs in the financial, accounting, and computing industries. However a large ratio may result in inconveniently large or small prices at some point in the cycle.

After a redenomination, the new unit often has the same name as the old unit, with the addition of the word new. The word new may or may not be dropped a few years after the change. Sometimes the new unit is a completely new name, or a "recycled" name from previous redenomination or from ancient times.

New unit	=	×	Old unit	year	Nature of the new unit
Turkish new lira	=	1 million	old lira	2005	"new" is an official designation and was dropped in 2009.
New Taiwan dollar	=	40 000	old dollars	1949	"new" is an official designation and is still used in official documents today.
Argentine austral	=	1 000	Peso argentino	1985	completely new name
Yugoslav 1993 dinar	=	1 million	1992 dinara	1993	no official designation
Brazilian real	=	2 750	cruzeiros reais	1994	recycled unit of Brazil before 1942
This table is not exhaustive.

Decimalisation

Main article: Decimalisation

All countries that previously had currencies based on pounds-shillings-pence (£sd) system (£1 = 20 shillings = 240 pence) have now adopted decimal currencies, with several changing the name of the main currency unit at the same time.

Currency union

Main article: Currency union

When countries form a currency union, redenomination may be required. The conversion ratio is often not a round number, and may be less than 1.

New unit	=	x	Old unit	year	Monetary union
Danish krone	=	0.5	Danish rigsdaler	1873	Scandinavian Monetary Union
Gulden österreichischer Währung	=	20/21	Gulden Conventions-Münze	1858	Wiener Münzvertrag between the states of the German Customs Union and the Austrian Empire
This table is not exhaustive.

List of Euro redenominations

The most notable currency union today is the Eurozone. In 2002, euros in cash form was introduced.

Country	Old unit	Exchange rate (old units per €)	Year
Belgium	Belgian franc	40.3399	1999
Luxembourg	Luxembourgish franc	40.3399	1999
Germany	Deutsche Mark	1.95583	1999
Andorra, Spain	Spanish peseta	166.386	1999
Andorra, France, Monaco	French franc	6.55957	1999
Ireland	Irish pound	0.787564	1999
Italy, San Marino, Vatican City	Italian lira	1936.27	1999
Netherlands	Dutch guilder	2.20371	1999
Austria	Austrian schilling	13.7603	1999
Portugal	Portuguese escudo	200.482	1999
Finland	Finnish markka	5.94573	1999
Greece	Greek drachma	340.75	2001
Slovenia	Slovenian tolar	239.64	2007
Cyprus	Cypriot pound	0.585274	2008
Malta	Maltese lira	0.4293	2008
Slovakia	Slovak koruna	30.126	2009
Estonia	Estonian kroon	15.6466	2011
Latvia	Latvian lats	0.702804	2014
Lithuania	Lithuanian litas	3.4528	2015

List of currency redenominations

This table lists various currency redenominations that have occurred, including currency renaming where the conversion rate is 1:1, but excluding decimalisation and joining the eurozone, already listed on the table above.

New unit	Exchange rate (old:new)	Old unit	Year	Country	Reason	Note
Hungarian forint	4×1029∶1	Hungarian pengő	1946	Hungary	Hyperinflation
Zimbabwean dollar (4th)	1×1012∶1	Zimbabwean dollar (3rd)	2009	Zimbabwe	Hyperinflation	Subsequently abandoned.
Greek drachma (2nd)	50,000,000,000∶1	Greek drachma (1st)	1944	Greece	Hyperinflation
Zimbabwean dollar (3rd)	10,000,000,000∶1	Zimbabwean dollar (2nd)	2008	Zimbabwe	Hyperinflation
Rentenmark	1,000,000,000∶1	Papiermark	1923	Germany	Hyperinflation
Yugoslav 1994 dinar	1,000,000,000∶1	1993 dinara	1994	Yugoslavia	Hyperinflation	Lasted for 23 days.
Chinese "silver" yuan	500,000,000∶1	"gold" yuan	1949	China (Republic of China)	Hyperinflation
Hungarian forint	200,000,000∶1	Hungarian adópengő	1946	Hungary	Hyperinflation
Yugoslav novi dinar	13,000,000∶1	1994 dinara	1994	Yugoslavia	Hyperinflation	Initially pegged to the Deutsche Mark upon renomination, but subsequently subject to drift.
Nicaraguan córdoba (oro, 3rd)	5,000,000∶1	Nicaraguan córdoba (2nd)	1991	Nicaragua	Inflation
Chinese "gold" yuan	3,000,000∶1	(old) yuan	1948	China (Republic of China)	Inflation
Nouveau zaïre	3,000,000∶1	First Zaïre	1993	Democratic Republic of the Congo	Inflation
Boliviano	1,000,000∶1	Peso boliviano	1985	Bolivia	Inflation
Peruvian nuevo sol	1,000,000∶1	Peruvian inti	1991	Peru	Hyperinflation	The "nuevo" designation lasted until 2015.
Yugoslav 1993 dinar	1,000,000∶1	1992 dinara	1993	Yugoslavia	Hyperinflation	no official designation
Second Kwanza	1,000,000∶1	Kwanza reajustado	1999	Angola	Inflation
Turkish new lira	1,000,000∶1	Turkish lira	2005	Turkey	Inflation	The "new" designation lasted until 2009.
Hryvnia	100,000∶1	Karbovanets (third)	1996	Ukraine	Inflation
Second Congolese franc	100,000∶1	Nouveau zaïre	1998	Democratic Republic of the Congo	Inflation
Bolívar Soberano	100,000∶1	Bolivar Fuerte	2018	Venezuela	Hyperinflation
New Taiwan dollar	40,000∶1	Taiwan dollars	1949	Taiwan (Republic of China)	Inflation	"new" is an official designation and is still used in official documents
United States dollar	25,000∶1	Sucre	2000	Ecuador	Inflation	Full dollarization for banknotes. Ecuador also issues centavo coins.
Hungarian pengő	12,500∶1	Hungarian korona	1927	Hungary	Inflation
Austrian schilling	10,000∶1	Austrian krone	1925	Austria	Inflation
Second Renminbi yuan	10,000∶1	First Renminbi yuan	1955	China (People's Republic of China)	Inflation
Peso argentino	10,000∶1	Peso ley	1983	Argentina	Inflation
Yugoslav 1990 dinar	10,000∶1	1966 dinara	1990	Yugoslavia	Inflation
Peso (convertible)	10,000∶1	Austral	1992	Argentina	Inflation
Polish złoty (3rd)	10,000∶1	Polish złoty (2nd)	1995	Poland	Inflation
Romanian leu (4th)	10,000∶1	Romanian leu (3rd)	2005	Romania	Inflation
New Ghanaian cedi	10,000∶1	Cedi	2007	Ghana	Inflation
Third Belarusian ruble	10,000∶1	Second Belarusian ruble	2016	Belarus	Inflation
Azerbaijani new manat	5,000∶1	Second Azerbaijani manat	2006	Azerbaijan	Inflation
Turkmenistani new manat	5,000∶1	(old) manat	2009	Turkmenistan	Inflation
Real	2,750∶1	Cruzeiro real	1994	Brazil	Inflation	Anchor currency: United States dollar
Cruzeiro (antigo)	1,000∶1	Real (old)	1942	Brazil	Inflation
Greek drachma (3rd)	1,000∶1	Greek drachma (2nd)	1954	Greece	Inflation
Chilean escudo	1,000∶1	First Chilean peso	1960	Chile	Inflation
Peso boliviano	1,000∶1	First boliviano	1963	Bolivia	Inflation
Cruzeiro (novo)	1,000∶1	Cruzeiro (antigo)	1967	Brazil	Inflation
First zaïre	1,000∶1	First congolese franc	1967	Democratic Republic of the Congo	Inflation
Nuevo peso	1,000∶1	Peso moneda nacional	1973	Uruguay	Inflation
Chilean peso	1,000∶1	Chilean escudo	1975	Chile	Inflation
Argentine austral	1,000∶1	Argentine peso (1983)	1985	Argentina	Inflation
Peruvian inti	1,000∶1	Peruvian sol (1863)	1985	Peru	Inflation
Cruzado	1,000∶1	Cruzeiro (novo)	1986	Brazil	Inflation
New Shekel	1,000∶1	Shekel	1986	Israel	Inflation
Nicaraguan córdoba (2nd)	1,000∶1	Nicaraguan córdoba (1st)	1988	Nicaragua
Cruzado Novo	1,000∶1	Cruzado	1989	Brazil	Inflation
Cruzeiro real	1,000∶1	Cruzeiro (third)	1993	Brazil	Inflation
Nuevo peso mexicano	1,000∶1	Peso mexicano	1993	Mexico	Inflation	"nuevo" was a temporary designation dropped in 1996
Peso uruguayo	1,000∶1	Nuevo peso	1993	Uruguay	Inflation
Croatian kuna	1,000∶1	Croatian dinar	1994	Croatia
Kwanza reajustado	1,000∶1	Novo kwanza	1995	Angola	Inflation
Second Russian ruble	1,000∶1	First Russian ruble	1998	Russia	Inflation
Bulgarian new lev	1,000∶1	Bulgarian lev	1999	Bulgaria	Inflation	Anchor currency: German mark
Surinamese dollar	1,000∶1	Surinamese guilder	2004	Suriname	Inflation	Old coins denominated in cents were declared to be worth their face value in the new cents.
New Mozambican metical	1,000∶1	(old) meticais	2006	Mozambique	Inflation
Zimbabwean dollar (2nd)	1,000∶1	Zimbabwean dollar (1st)	2006	Zimbabwe	Inflation
Second Sudanese pound	1,000∶1	First Sudanese pounds	2007	Sudan	Inflation	Currency unification (peace treaty)
Bolivar Fuerte	1,000∶1	(old) Bolivar	2008	Venezuela	Inflation
Zambian kwacha	1,000∶1	(old) Kwacha	2013	Zambia	Inflation
São Tomé and Príncipe dobra (2nd)	1,000∶1	São Tomé and Príncipe dobra (1st)	2018	São Tomé and Príncipe	Inflation
Liberation đồng	500∶1	Đồng	1975	South Vietnam	Fall of Saigon
South Korean hwan	100∶1	first South Korean won	1954	Republic of Korea	Inflation after Korean War(1950-1953), Independence from Japan(1945)
New French Franc	100∶1	French Franc	1960	France	Inflation	"New" was a temporary designation dropped in 1963
New Finnish markka	100∶1	Finnish markka	1963	Finland	Inflation
Yugoslav 1966 dinar	100∶1	1944 dinara	1966	Yugoslavia	Inflation
Peso ley	100∶1	Peso moneda nacional	1970	Argentina	Inflation
Icelandic króna	100∶1	Icelandic króna	1981	Iceland	Hyperinflation
Second Ugandan shilling	100∶1	First Ugandan shilling	1987	Uganda	Inflation
Lithuanian litas	100∶1	Talonas	1993	Lithuania	Inflation
Second macedonian denar	100∶1	First macedonian denar	1993	North Macedonia
Second Sudanese pound	100∶1	Sudanese dinars	2007	Sudan	Inflation	Currency unification (peace treaty)
North Korean won (2nd)	100∶1	North Korean won (1st)	2009	North Korea	Inflation	Redenomination by state
CFA franc	65∶1	Guinea-Bissau peso	1997	Guinea-Bissau	monetary union	West African CFA franc
Yugoslav 1944 dinar	40∶1	Independent State of Croatia kuna	1944	Yugoslavia		Reconstituted Yugoslav Federation dinar replacing currency in use in its constituents
Peso moneda nacional	25∶1	Peso moneda corriente	1881	Argentina	Inflation
Yugoslav 1944 dinar	20∶1	Serbian 1941 dinar	1944	Yugoslavia		Reconstituted Yugoslav Federation dinar replacing currency in use in its constituents
Nicaraguan córdoba (1st)	12.5∶1	Nicaraguan peso	1912	Nicaragua
South Korean won (2nd)	10∶1	South Korean hwan	1963	Republic of Korea	Inflation
Guinean syli	10∶1	Guinean franc (1st)	1971	Guinea
Israeli shekel (1st)	10∶1	Israeli pound	1980	Israel	Inflation
Azerbaijani manat (2nd)	10∶1	Soviet ruble	1992	Azerbaijan	Independence (from the Soviet Union)
Sudanese dinar	10∶1	First Sudanese pounds	1992	Sudan	Inflation	Applied only to North Sudan
Yugoslav 1992 dinar	10∶1	1990 dinara	1992	Yugoslavia	Inflation
First Belarusian ruble	10∶1	Soviet ruble	1994	Belarus	Break-up of the Soviet Union	When Soviet rubles were still in use in Belarus, Belarusian ruble denominations were implied to be ten times more than Soviet rubles.
Second Mauritanian ouguiya	10∶1	First Mauritanian ouguiya	2018	Mauritania	Inflation
United States dollar	8.75∶1	Colón	2001	El Salvador	dollarization
Peso moneda corriente	8∶1	Real	1826	Argentina
Ouguiya	5∶1	CFA franc	1973	Mauritania
Ariary	5∶1	Franc malgache	2005	Madagascar		From 1961, banknotes were issued denominated in both francs and ariary.
CFA franc	4∶1	Ekwele	1985	Equatorial Guinea	monetary union	Central African CFA franc
CFA franc	2∶1	Franc malien	1984	Mali	monetary union	West African CFA franc
Ghanaian cedi	1.2∶1	Old cedi	1967	Ghana	Decimalisation, change of government	This was an opportunity to remove Kwame Nkrumah from every denomination.
Hungarian korona	At par	Austro-Hungarian krone	1919	Hungary	Break-up of Austria-Hungary
Austrian krone	At par	Austro-Hungarian krone	1920	Austria	Break-up of Austria-Hungary
First Guinean franc	At par	CFA franc	1959	Guinea	Independence
Franc malien	At par	CFA franc	1962	Mali	Independence
First Ugandan shilling	At par	East African shilling	1966	Uganda	Independence
Peseta guineana	At par	Spanish peseta	1969	Equatorial Guinea	Independence
First Kwanza	At par	Second Angolan escudo	1975	Angola	Independence
Ekwele	At par	Peseta guineana	1975	Equatorial Guinea
Guinea-Bissau peso	At par	Portuguese Guinean escudo	1975	Guinea-Bissau	Independence
Franc guinéen	At par	Syli	1985	Guinea
Novo kwanza	At par	First Kwanza	1990	Angola	seizure of money supply by government	Angolans could only exchange 5% of all old notes for new ones; they had to exchange the rest for government securities
Cruzeiro (third)	At par	Cruzado Novo	1990	Brazil	renaming
Croatian dinar	At par	Yugoslav 1990 dinar	1991	Croatia	Independence
Talonas	At par	Soviet ruble	1991	Lithuania	Independence (from the Soviet Union)
Slovenian tolar	At par	Yugoslav 1990 dinar	1991	Slovenia	Independence
First macedonian denar	At par	Yugoslav 1990 dinar	1992	North Macedonia	Independence	The first denar was a temporary currency, no coins were issued
Karbovanets (third)	At par	Soviet ruble	1992	Ukraine	Independence (from the Soviet Union)
Đồng (unified)	0.8∶1	Liberation đồng	1978	South Vietnam	Unification
Austro-Hungarian krone	0.5∶1	Austro-Hungarian gulden	1892	Austria-Hungary	monetary union	Moving from silver to gold standard

Alternatives

Japanese invasion money suffered from heavy inflation. At the end of World War II governments of liberated countries and territories opted to simply declare them worthless.

In 2016, the Colombian peso was rated at around 3,000 per U.S. dollar, with banknotes up to 50,000 pesos. Instead of redenominating the currency, a new banknote design was introduced, with the last three zeroes replaced by the word "mil" (thousand), making the values easier to read.

See also

• Decimalisation
• Denomination (currency)
• Devaluation
• Dollarization
• Hyperinflation
• Inflation