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. Central Bank

    The entity responsible for overseeing the monetary system for ...
  3. Currency

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

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

    The actions of a central bank, currency board or other regulatory ...
  6. Monetary Base

    The total amount of a currency that is either circulated in the ...
Related Articles
  1. How The U.S. Government Formulates Monetary ...
    Personal Finance

    How The U.S. Government Formulates Monetary ...

  2. Get To Know The Major Central Banks
    Forex Education

    Get To Know The Major Central Banks

  3. The Currency Board: Understanding The ...
    Personal Finance

    The Currency Board: Understanding The ...

  4. Dollarization Explained
    Forex Education

    Dollarization Explained

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center