Redenomination

AAA

DEFINITION of 'Redenomination'

1. The process whereby a country's currency is recalibrated due to significant inflation and currency devaluation. Certain currencies have been redenominated a number of times over the last century for various reasons.

2. The process of changing the currency value on a financial security.

INVESTOPEDIA EXPLAINS 'Redenomination'

1. For example, the Bulgarian lev was redenominated due to inflation arising at the end of the Second World War. After the redenomination, one "new" lev was equal to 100 "old" levs. The lev was redenominated three times in the twentieth century.

2. A recent example of redenomination arose when the euro was introduced and the denomination on many European securities had to be changed to the euro.

RELATED TERMS
  1. Devaluation

    A deliberate downward adjustment to the value of a country's ...
  2. Monetary Base

    The total amount of a currency that is either circulated in the ...
  3. Currency

    A generally accepted form of money, including coins and paper ...
  4. Central Bank

    The entity responsible for overseeing the monetary system for ...
  5. Inflation

    The rate at which the general level of prices for goods and services ...
  6. Monetary Policy

    The actions of a central bank, currency board or other regulatory ...
RELATED FAQS
  1. Where did the term 'pip' in currency exchange come from?

    The term pip is an acronym for percentage in point or price interest point. It measures a unit of change within a pair of ... Read Full Answer >>
  2. What is the difference between pips, points, and ticks?

    Point, tick and pip are terms used to describe price changes in the stock market and other markets. While traders and analysts ... Read Full Answer >>
  3. What are the nations with the lowest PPP (purchasing power parity) with respect to ...

    Purchasing power parity (PPP) is one of several economic indicators used to compare how much goods cost from country to country. ... Read Full Answer >>
  4. What's the difference between bid-ask spread and bid-ask bounce?

    Although both the bid-ask spread and the bid-ask bounce relate to the bid-ask price of a stock or other investment, they ... Read Full Answer >>
  5. Are Downside Tusuki Gap patterns important when trading forex pairs?

    The most heavily intertraded national currencies on forex markets are often referred to as "commodity pairs," "the majors" ... Read Full Answer >>
Related Articles
  1. Personal Finance

    How The U.S. Government Formulates Monetary Policy

    Learn about the tools the Fed uses to influence interest rates and general economic conditions.
  2. Forex Education

    Get To Know The Major Central Banks

    The policies of these banks affect the currency market like nothing else. See what makes them tick.
  3. Personal Finance

    The Currency Board: Understanding The Government's Bank

    Currency board, central bank - what's the difference? Find out more about this little-known monetary authority.
  4. Forex Education

    Dollarization Explained

    Find out how fledgling economies can find some stability in their currency and attract foreign investment.
  5. Personal Finance

    What Are Central Banks?

    They print money, they control inflation, and much, much more. All you need to know about central banks is here.
  6. Economics

    What Is Money?

    It's a part of everyone's life, and we all want it, but do you know how it gains value and how it is created?
  7. Forex

    Understanding Currency Carry Trade

    A currency carry trade is a long-term investment strategy used primarily by large institutional investors. The purpose is to make a profit over time from differences in interest rates between ...
  8. Forex

    What Is Online Trading Academy?

    Online Trading Academy educates individuals about stocks, forex, futures and options as well as investment strategies based on the student’s trading style.
  9. Forex Education

    Understanding The Spread in Retail Currency Exchange Rates

    Understanding how exchange rates are calculated and shopping around for the best rates may mitigate the effect of wide spreads in the retail forex market.
  10. Forex

    Main Factors That Influence Exchange Rates

    The exchange rate is one of the most important determinants of a country's relative level of economic health, and can impact your returns.

You May Also Like

Hot Definitions
  1. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  2. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  3. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  6. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
Trading Center