Devaluation of the Leu

[split from http://www.worldwar2.ro/forum/index.php?showtopic=1241]

The coin is of 500 lei. This is a hint that inflation was strong, long before 1944.

50 years before (1891, but this means that era) you could buy a pair of oxen with a "5 lei" silver coin issued in 1881. In the same days, with "5 bani" (1/20th of a "leu") you could buy a pair of rural style shoes, called "ciubote" or "opinci" in those days.

This post has been edited by Victor on August 22, 2006 05:39 am

The largest devaluation of the Romanian leu took place immediately after WWI when the leu was valued at approximately one thirtieth or one fortieth of the pre-WWI value. The causes probably were in the destruction of war, the lack of gold in the National Bank treasury (the pre-WWI treasury being in the tight grip of the Soviets), the economic effort to integrate the newly united territories or a combination of all these factors. In comparison, the devaluation in the inter-war period was much more modest, the 1940 leu being approximately one sixtieth or one seventieth of the pre-WWI value (less than a factor of two compared to the 1920s).

The Romanian currency, the "leu"/"lion", took another hit after August 1944.
The soldiers of the Red Army received about 1 billion (1,000,000,000) lei as spending cash in Romania. These paper money were printed in Soviet Union, looked different form the Romanian "leu", but the Romanian government was forced to accept them.
Another reason for the devaluation of the "leu" after August 1944: the Soviets stole all gold paid by Germany for the Romanian oil and wheat, so the "leu" lost its coverage in gold.