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.
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.