Contemporary Period

World War I (1914-1918)

Despite the neutrality adopted at the beginning of World War I, Romania had to cope with substantial expenses related to the need to sustain the war preparations. The expenses were covered by the public debt raised internally and externally. The national currency’s gold convertibility was not suspended, but limited to certain coins, with the exception of those in high demand (the napoleon and the gold sterling pound). To avoid silver speculations, the NBR put into circulation 1, 2 and 5 lei banknotes.

The inflation that had started at the end of the neutrality period was strongly felt after Romania had entered the war in 1916. Initially, this was triggered by the suspension of the banknotes’ convertibility on 12 April 1917, thus marking the end of the monometallic gold standard in Romania. Another cause was the printing of NBR uncovered issues, as requested by the government in order to cover the war expenses. The phenomenon was also influenced by the authorization given by the Ministry of Finance to issue paper money.

At the end of 1916, the German Military Administration (GMA) settled in Bucharest after it was evacuated by Romanian authorities. The same year, the representatives of the Central Powers decided in Berlin to issue paper money for the occupied territory of Romania. The General Romanian Bank (GRB), a bank with German capital established in 1895, was designated the issuing institution. The entire volume of the issue would be covered by a deposit especially constituted at the central German bank (Reichsbank), at the rate of 80 imperial marks = 100 lei. At the end of the war, the deposit had to be covered by the Romanian government. In this way, the goods bought with GRB money by the occupation authorities were actually acquired for free.

The GRB money was printed in Berlin and had the following face values: 25 and 50 bani, 1, 2, 5, 20, 100 and 1,000 lei. The lei issued by the National Bank of Romania were still allowed, but the GMA had imposed a lower exchange rate by comparison to the GRB leu (1 NBR leu = 74 imperial marks). The difficulties in making the right calculations caused by the existence of two different exchange rates for the two types of lei had determined the GMA to match the rates. However, at the same time, the GMA had ordered the occupation military to make payments to the population only in GRB lei.

The inter-war period (1919-1939)

In the first years after World War I, the leu suffered a high depreciation due to the massive banknote issues needed to cover the public budget deficit and to replace the foreign currencies still circulating in Romania, and also due to the disastrous fall in production owing to the war damages.

One of the major difficulties encountered by the governments that had run the country after the 1918 Union was the foreign currencies still circulating in the new Romanian territories. Monetary unification was realized in 1920 based on the loans contracted by the Romanian state from the NBR to cover the foreign banknotes withdrawn from circulation. The foreign currencies exchange did not lack financial speculations, especially regarding the Austrian-Hungarian crown.

As early as 1920, the NBR recommended the government the revaluation of the national currency, by decreasing the money circulation with 60% while, in parallel, realizing the monetary unification. Because the authorities did not consider possible the achievement of both measures at the same time, the project was only implemented in 1925.

According to the new Monetary Act of 7 February 1929, the leu represented 10 mg of gold with a fineness of 900‰. The national currency was once again convertible in gold coins, gold bars or gold convertible foreign currencies. The Romanian government was authorized to issue fractional coins of 1, 2, 5, 10 and 20 lei made of aluminum and nickel alloy. The total of the fractional coins in circulation could not exceed 3 billion lei.

The first issue was ordered at the British Royal Mint. The 5 and 20 lei coins have on the obverse the effigy of King Ferdinand and on the reverse the country’s coat of arms (5 lei) and a group of peasant women (20 lei). The 1930 and 1931 issues, including the 5, 10 and 20 lei coins, were ordered at the French and British mints.

World War II (1940-1945)

Following the Vienna Award of 30 August 1944, once the Northern Transylvania was reverted to Hungary, monetary circulation was structured in line with the norms of the Hungarian National Bank. The Hungarian currency was introduced and the Romanian leu was exchanged at a rate of 1 pengö = 30 lei. After the liberation of Transylvania by the Romanian and Soviet troops in the fall of 1944, pengö, Red Army pengö and Soviet rubles continued to circulate alongside Romanian lei. The elimination of foreign currencies’ circulation was accomplished in April-May 1944.

After the political regime change that took place in Romania on 6 September 1940, by way of King Carol II’s abdication and the proclamation of the National Legionary State, no new banknotes were issued with ensigns consistent with the new developments. It was decided to apply an overprint with the date 6 September 1940 written in an oval medallion over the effigy of King Carol II.

During the war, coins were withdrawn from circulation for other reasons than financial ones. In 1941, the 50 and 100 lei coins were withdrawn due to the fact that the nickel they were made of was considered a strategic material and was used in the armament industry. In their place, were issued 2 lei coins made of zinc.

In Romania, like in other territories occupied during World War II, the Soviet military issued occupation currency to ensure its current supplies. These banknotes had been legal tender only while the Soviet troops had crossed the Romanian territory. The Armistice Convention signed by Romania with the Allied Powers on 12 September 1944 stated that the Romanian government had to withdraw and redeem the lei issued by the Red Army High Command. On 1 October 1944, the Soviet lei ceased to be legal tender.

In December 1944, the Ministry of Finance was authorized to launch a loan, the National Revival Loan, meant to cover Romania’s expenses that had arisen from the signing of the Armistice Convention. The loan was worth 50,000 lei and was accompanied by a commemorative gold medal, “Ardealul Nostru” (“Our Transylvania”), minted in 1 million pieces. The medal had on the obverse the overlapped effigies of Michael I, Ferdinand I and Michael the Brave. On the reverse, around the head of an eagle with a cross in its beak, were represented the coat of arms of the 11 Transylvanian counties rejoined in 1944. Because it had similar characteristics with the French gold coin of 20 francs (having a Gallic rooster on the reverse), the medal was known under the name „cocoşel” (“little rooster”).

The communist regime (1946-1989)

After the 1947 monetary reform, new NBR banknotes and new fractional coins were introduced, issued by the Ministry of Finance, at a rate of 1 new leu per 20,000 old lei.

A new monetary law was adopted in 1952, stipulating the following categories of legal tender: banknotes issued by the State Bank of the People’s Republic of Romania, state treasury notes issued by the Ministry of Finance and fractional coins. The rate to recalculate prices, rates, wages and the state companies’ accounts was of 20 old lei per 1 new leu.

Due to the new political realities and the change of the country’s name to the Socialist Republic Romania, a new monetary issue was put into circulation in 1966.

The leu between 1990 and 2005

The change of the political regime in December 1989 determined the replacement of the national currency. In 1991, the National Bank launched its first new banknote issue (500 lei), dedicated to sculptor Constantin Brâncuși. Over the following years, the central bank continued issuing banknotes illustrating important representatives of Romanian culture: biologist Grigore Antipa (200 lei banknote of 1992), writer Mihai Eminescu (1,000 lei banknotes of 1991, 1993, 1998; 500 lei banknote of 2005), philosopher Lucian Blaga (5,000 lei banknote of 1998; 200 lei banknote of 2006), historian Nicolae Iorga (10,000 lei banknotes of 1994, 1999, 2000; 1 leu banknote of 2005), composer George Enescu (50,000 lei banknotes of 1996, 2000, 2001; 5 lei banknote of 2005), painter Nicolae Grigorescu (100,000 lei banknotes of 1998, 2001; 10 lei banknotes of 2005, 2008), airplane engineer and inventor Aurel Vlaicu (500,000 lei banknote of 2000; 50 lei banknote of 2005) and playwright I.L. Caragiale (1,000,000 lei banknote of 2003; 100 lei banknote of 2005).

In 1999, the National Bank put into circulation, for the first time, a polymer banknote, the 2,000 lei celebrating the total solar eclipse of 11 August 1999. This type of material represents the top technological achievement in banknote production and presents several advantages compared to the traditional paper: it incorporates supplementary security features, it is more durable, easier to process on automatic machinery and it can be recycled into a variety of plastic products.

In the following years, the paper banknote issues were progressively replaced, so that, for the 2005 denomination, the entire issue was printed on polymer.