The Leu (plural = Lei) is the foreign money of Romania. Leu literally means “lion” in English. It is partitioned into one hundred bani (singular = ban).
Romania joined the European Union in January 2007, however the Leu continues to be used as the official currency. The Euro is expected to be adopted as the official currency of Romania in 2015.
Economy
Romania is the 11th largest economy in the European Union (8th largest based on Purchasing Power Parity). The economy is considered a developing, upper-middle income market economy.
Romania is currently a relatively poor country compared to its neighbors, driven primarily by the failed economic policies created by the Communist regime that led the nation in the second half of the 20th century.
Major reforms have taken place since the fall of Communism and Romania’s entrance into the European Union (in 2007), leading to optimism on the future of the nation.
Romania has an abundance of natural resources, including oil and coal, as well as iron, copper, and numerous other precious metals. At one point Romania was the largest producer of oil in the EU, however, much of the country’s reserves was squandered in the Communist era.
The services sector employs more than half of the workforce in Romania. Agriculture provides ~30% of the country’s jobs, and industry and construction represent ~25% of the workforce.
History
The first Leu was introduced in Romania in 1867.
By early 1878 the Russian Ruble was treasured so highly that the Romanian Leu was nearly driven out of circulation. In response, the country decided to adopt a gold standard in 1889.
When the gold standard was abandoned in 1914, the valuation of the Leu fell dramatically. To counter the devaluation, the exchange rate was pegged to the US Dollar at varying values between 1929 and 1941.
In World War II, Romania allied with Germany, and pegged the Leu to the Reichsmark. When the country was Soviet occupied, the Leu was valued at 1 Leu = 100 Rubles.
On August 15, 1947, the second Leu was introduced. The transition happened with no advance warning and limits on the amount an individual was able to exchange, in order to equalize classes and prepare for communism.
The third Romanian Leu (ROL) was introduced on January 28, 1952 with varied rates depending on the type of exchange (debt, deposits, cash).
Over the next few decades, the Communist government moved away from the gold standard and put severe restrictions on the sales and use of foreign currency, leading to the country’s economic downfall.
After the fall of Communism, the country went through significant economic reform, legalizing the ownership of foreign currency and several other key policies.
On July 1, 2005, the fourth Romanian Leu (RON) was introduced.
