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 represented 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. 

Denominations and Appearance of the New Leu

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 Romanian new leu continues to recover from the global economic recession of 2008 and the subsequent economic downturn in Europe.

Romanian Economy and the New Leu

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. Composite Index of Leading Indicators

    The composite index of leading indicators is published monthly ...
  2. Banknote

    A banknote is a negotiable promissory note, which a bank can ...
  3. Euro

    The euro is the official currency of 19 members of the European ...
  4. KRW

    The currency abbreviation or currency symbol for the Korean won ...
  5. Currency Symbol

    A graphical symbol used as a substitute for the actual name of ...
  6. USD (United States Dollar)

    USD is the currency abbreviation for the United States dollar, ...
Related Articles
  1. Insights

    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. Investing

    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. Insights

    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. Insights

    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. Personal Finance

    2 Reasons Why the Stock Market Leads the Economy

    Pay attention to how economic strength can follow a sustained stock market advance and how economic weakness can result from a stock market slump.
  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.
  7. Trading

    6 Top-Traded Currencies and Why They're So Popular

    Every currency has specific features that affect its underlying value and price movements in the forex market.
  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. Insights

    The Go-To Currency In 50 Years

    Discover why the euro will likely become heir to the currency throne.
  10. 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?
RELATED FAQS
  1. The Difference Between the International Monetary Fund and the World Bank

    Learn about the International Monetary Fund and the World Bank and how they are differentiated by their respective functions ... Read Answer >>
  2. How do changes in national interest rates affect a currency's value and exchange ...

    Generally, higher interest rates increase the value of a given country's currency, but Interest rates alone do not determine ... Read Answer >>
  3. How are international exchange rates set?

    Knowing the value of your home currency in relation to different foreign currencies helps investors to analyze investments ... Read Answer >>
  4. What are key benefits to a country that has engaged in a policy of currency depreciation?

    Learn about key benefits to a country engaging in a policy of currency depreciation, such as smaller trade deficits, employment ... Read Answer >>
  5. How do externalities affect equilibrium and create market failure?

    Learn about the responsibilities of the International Monetary Fund and its functions regarding the international monetary ... Read Answer >>
Hot Definitions
  1. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  2. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  3. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  4. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
  5. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
  6. Monte Carlo Simulation

    Monte Carlo simulations are used to model the probability of different outcomes in a process that cannot easily be predicted ...
Trading Center