RON - Romanian Leu

Overview of the Romanian Leu

The currency is issued and regulated by the National Bank of Romania, which ensures its stability and controls inflation through monetary policy. The Leu is divided into 100 bani, and the currency is widely used for daily transactions, savings, and trade within the country. 

Despite economic challenges, including inflationary pressures in the past, the Romanian Leu has remained relatively stable, with periodic fluctuations against stronger currencies such as the Euro and the US Dollar. Romania is currently a member of the European Union, but it still uses the Leu as its currency.

History of the Romanian Leu (RON)

The Romanian Leu has gone through significant historical changes, reflecting the political, economic, and social shifts in Romania.

• 1867 - 1947

The Romanian Leu was first introduced in 1867 during the Austro-Hungarian Empire. Prior to that, Romania used various foreign currencies, such as French, Turkish, and Romanian coins. After gaining independence in 1877, the Romanian Leu replaced all former currencies. In the early 20th century, Romania carried out monetary reforms to stabilize the economy.

• 1947 - 1989

During World War II, Romania came under communist rule. The country issued coins and banknotes, but they depreciated sharply due to inflation and ineffective government policies. In 1966, Romania implemented a major currency reform, replacing the old Leu (ROL) with the new Leu (RON) at a rate of 1 new Leu = 10,000 old Leu, to curb inflation and restructure the economy.

• 1989 to Present

After the fall of the communist regime in 1989, Romania faced economic hardship, with a period of decline and high inflation. The country carried out major reforms to integrate with the EU, notably the 2005 reform to stabilize the exchange rate of the Romanian Leu in the international market.

Today, the Romanian Leu (RON) remains the official currency, even though Romania has been an EU member for years and has not adopted the Euro as its currency.

Current Denominations of the Romanian Leu (RON)

The Romanian Leu (RON) is currently issued in both banknotes and coins:

Romanian Leu Banknotes

• Commonly used: 1 leu, 5 lei, 10 lei, 50 lei, 100 lei, and 200 lei

• Less commonly used: 20 lei and 500 lei

The banknotes are made from polymer material, making them more durable and difficult to counterfeit. They feature watermarks with portraits or symbols that are easily recognizable when held up to light.

Romanian Leu Coins

• Commonly used: 10 bani and 50 bani

• Less commonly used: 1 ban and 5 bani

The obverse of the coins features the coat of arms of Romania, symbolizing the nation and ensuring consistency across the coinage. The coins have distinct colors and materials to help differentiate between denominations. All coins are marked with the year of issuance.

Current Exchange Rate of the Romanian Leu (RON)

Currently, the exchange rate of the Romanian Leu (RON) against the US Dollar (USD) and Euro (EUR) is:

• 1 RON = 0.2165 USD

• 1 RON = 0.2009 EUR

The value of the US Dollar is higher than both the RON and the EUR. This is because the US Dollar tends to be stronger as it is the global reserve currency, supported by the stability and strong influence of the US economy.

Factors Influencing the Value of the Romanian Leu (RON)

The value of the Romanian Leu (RON) is influenced by several factors:

• Macroeconomic Situation: GDP growth, inflation, and the monetary policy of the National Bank of Romania (NBR) all affect the value of the RON. If the economy grows strongly, the RON tends to strengthen.

• Interest Rates: The interest rates set by the National Bank of Romania are a key factor. Higher interest rates can attract foreign investors, thereby increasing the value of the RON.

• Trade Relations and Imports/Exports: Romania’s main trading partners are within the EU, so any changes in imports or exports can affect capital flows and the exchange rate of the RON.

• Fiscal Policy and Political Stability: Romania's government and political reforms can influence investor confidence in the RON. Political stability and positive reforms can increase the currency's value.

• EU and Regional Situation: As a member of the European Union, Romania’s currency is also impacted by decisions and policy changes within the EU, as well as the economic situation of other countries in the region.

The value of the Romanian Leu (RON) depends on various financial, economic, and political factors. Additionally, Romania’s membership in the EU means that decisions made by the European Union also influence the value of the RON.