The New Banknotes Will Be Similar to the Euros in Size

Starting July 1st, 2005, the Romanian National Bank will drop four zeros from the currency, turning the current 10,000 "light" ROL into the future one "heavy" ROL. The currency now in use will continue to circulate until 31 December 2006. This time the RNB will change the old money into the new ones till the end of 2009.

The new banknotes will be made of plastic, like the old ones, but they will be smaller, identical in size to the euros. The RNB governor, Mugur Isarescu, thinks that the change will encourage giving change correctly and advertising prices with two digits after the comma.

Banknotes of six different values will circulate on the market: 5 lei (now 50,000 lei), 10 lei (now 100,000 lei), 100 lei (now 1,000,000), and 500 lei (corresponding to 5,000,000). The new divisions of the new ROL will be 1 ban for the old 100 lei, 5 bani for the old 500 lei, 10 bani for the old 1,000 lei and 50 bani for the old 5,000 lei.

According to Isarescu, the money currently on the market will cease to circulate in a short while. The new banknotes and the old ones will both be valid for 16 months, till 31 December 2006, while the banknotes of lower denomination, like the current 10,000 lei and 50,000 lei will cease to exist even sooner.

The design and the colors for the new banknotes will stays similar to that of the old banknotes, and the personalities depicted on them will be the same too. The only banknote which has no correspondent at present will be the 500 lei banknote; it will carry the portrait of [the national poet] Mihai Eminescu. "The 500 lei banknote will be more sophisticated, carrying all security features required for a high value banknote, equivalent to over 100 euros, but if the ROL climbs, it could be worth even more," said Isarescu.

The fact that the new banknotes will have identical size with the euros will allow the banks to save money on an otherwise a costly operation of changing the features of the ATMs, at the time Romania will join the European Union and adopt its currency. While the change of the ATMs features to accommodate the new banknotes will be allowed to take place only after July 1st, 2005.

Florin Georgescu, the RNB vice-governor, said that the time-table for changing the old banknotes with the new ones will adapt to the perception the population will have on the matter and to the interests banks and companies will hold. "By the end of next year half of the currency presently circulating will be changed into the new banknotes; the RNB could accelerate the printing process so that changing the old banknotes with the new ones to end well-ahead of the 31 December 2006 dead-line," said Georgescu.

The current banknotes will cease to carry value after January 1st, 2007, but changing them for the new money will be allowed for another three years, "Which goes to prove that the move does not perform any confiscation of property. That the two different types of banknotes are valid simultaneously shows no one will gain and no one will loose. It will just become easier to handle the money, and they will preserve their value," said Isarescu.
He also said that though costs with printing the new money will be higher in the next six years, in the long run, they will be far lower than they currently are. The RNB estimated that it will spend some 30 million dollars in the first year set for changing the banknotes.

Isarescu also explained that cutting four zeros out of the current value of banknotes will not bring about inflation. "The prices using the new, 10,000 times smaller, values will be advertised at the same time with the current prices, for four months ahead of the actual change taking place, and then we will see if prices changed," Isarescu said. On the other hand, Eugen Dijmarescu, vice-governor of the RNB, recognized that other countries which changed their banknotes to lower values experienced a price hike some one month ahead of the official date of the change, and then a drop of the inflation.