RON (Romanian New Leu)

DEFINITION of 'RON (Romanian New Leu)'

RON is the abbreviation for the Romanian new leu, the currency for Romania. The Romanian new leu is made up of 100 bani and is often presented with the symbol L. The new leu replaced the old Romanian leu, currency symbol ROL, in July 2005 at a rate of 10,000 old leu to one new leu.

BREAKING DOWN 'RON (Romanian New Leu)'

The new leu is the fourth leu in a series of currencies brought about through revaluations since 1867. The current version was used alongside the previous leu from March 2005 until June 2006 during the conversion period. Throughout the leu's history, it has been pegged to the currencies of other nations, such as the German reichsmark, the American dollar and the Russian ruble. As of April 2016, the Romanian new leu is worth approximately 25 American cents. Inversely, 4 new lei make $1.

Denominations and Appearance

Romanian new lei come in coinage denominations of 1 ban, followed by 5, 10 and 50 bani. Banknotes for new lei go from 1 leu and up to 5, 10, 50, 100, 200 and 500 lei. The smallest bills in value have the smallest size in both width and length. The largest bill has the largest size.

The front of each banknote depicts an important figure from Romanian history alongside a plant. As an example, the 500 lei note shows poet Mihai Eminescu and lime leaves with flowers. The reverse of the bill depicts a building important to Romania. The 500 lei piece has the Ia_i University Library and a page from Timpul newspaper. The Romanian new leu continues to recover from the global economic recession of 2008 and the subsequent economic downturn in Europe.

Romanian Economy

Romania joined the European Union in 2007, yet it has been unable to meet the financial standards for becoming part of the eurozone. Romania could not meet the target for becoming part of the Exchange Rate Mechanism II by 2016; therefore, it had to delay going to the euro until past 2019. Romania remains one of the European Union's poorest countries even though it has enacted monetary and financial reforms in its bid to move to the euro.

After the global economic downturn, Romania needed a $26 billion emergency aid package from the International Monetary Fund (IMF) and Europe. Despite the assistance, the country's gross domestic product (GDP) fell backward until 2011. After instituting reforms, Romania's economic growth returned due to industrial exports and bountiful agricultural harvests. In 2015, the budget deficit shrank, and for the first time since the end of communism in 1989, Romania went through a time of deflation instead of inflation. The deflationary period allowed the National Bank of Romania to loosen monetary policy.

RELATED TERMS
  1. Currency Union

    When two or more groups (usually countries) share a common currency ...
  2. NZD (New Zealand Dollar)

    The currency abbreviation or currency symbol for the New Zealand ...
  3. USD (United States Dollar)

    The currency abbreviation for the United States dollar (USD), ...
  4. European Monetary System - EMS

    A 1979 arrangement between several European countries which links ...
  5. National Currency

    The currency or legal tender issued by a nation's central bank ...
  6. Hard-Coded Stock

    This is a term that refers to a company's stock symbol or ticker ...
Related Articles
  1. Investing

    Some Leading Indicators Are Signalling a Recession

    Several leading economic indicators have peaked, suggesting that a recession before the years' end is not out of the question, according to Deutsche Bank.
  2. Trading

    Buying Euros as a Long-Term Investment: Risks and Rewards

    Learn about the potential risks and rewards of long term investing in the euro and the current status of the European Union's financial markets.
  3. Markets

    What Are The Advantages Of Not Adopting The Euro?

    European Union countries that do not use the euro have a few advantages over eurozone countries. Investopedia explores how.
  4. Markets

    No Exit: What Could Happen If the Eurozone Breaks Up?

    There is no exit strategy for nations in the eurozone or the EU because most members acknowledge that they are far better off together than apart.
  5. Trading

    One World, One Currency: Could It Work?

    This idea has been debated for decades, but could it really work? Which countries would benefit? What are the downfalls? How would supply and printing factor in?
  6. Trading

    The Effects Of Currency Fluctuations On The Economy

    Currency fluctuations are a natural outcome of the floating exchange rate system that is the norm for most major economies. The exchange rate of one currency versus the other is influenced by ...
  7. Trading

    A Primer On Currency Regimes

    Currency regimes are dynamic and complex, reflecting the ever-changing landscape of their respective nations' monetary and fiscal policies.
  8. Trading

    Behind The Euro: History And Future

    The euro was designed to create economic parity among eurozone nations. Discover where it's going and where it's been.
  9. Markets

    Forex Tutorial: Forex History and Market Participants

    Given the global nature of the forex exchange market, it is important to first examine and learn some of the important historical events relating to currencies and currency exchange before entering ...
  10. Trading

    Drastic Currency Changes: What's The Cause?

    Currency fluctuations often defy logic. Learn the trends and factors that result in these movements.
RELATED FAQS
  1. When and why did the euro make its debut as a currency?

    On January 1, 1999, the European Union introduced its new currency, the euro. Originally, the euro was an overarching currency ... Read Answer >>
  2. How are international exchange rates set?

    International currency exchange rates display how much one unit of a currency can be exchanged for another currency. Currency ... Read Answer >>
  3. How do changes in national interest rates affect a currency's value and exchange ...

    Understand the role that changes in interest rates can play in determining the value and foreign exchange rate of a country's ... Read Answer >>
  4. How does inflation affect the exchange rate between two nations?

    Understand how inflation can affect foreign exchange rates of a currency and how it is just one of many economic factors ... Read Answer >>
  5. What is foreign exchange?

    Foreign exchange, or Forex, is the conversion of one country's currency into that of another. In a free economy, a country's ... Read Answer >>
  6. Is there a world currency? If so, what is it?

    There is no such thing as a world currency. However, since World War II, the dominant or reserve currency of the world has ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center