Currency cut
Currency cut is the introduction of a new currency with a fixed accounting unit for the old currency, usually in a decimal ratio. The old currency is taken out of the course and exchanged for the new currency in the fixed ratio. A currency cut makes sense if inflation results in oversized sums, so that an under-currency would no longer make sense, or if a new currency is introduced. If there is a change in the share of assets, this is not just a currency cut, but also a currency reform . So was z. For example, with the Israeli currency average of July 4, 1985, only those book money stocks that were reported to the tax office were exchanged. With the introduction of the new currency, large stocks of book money were eliminated, which amounts to a currency reform: The money supply was reduced at the expense of tax evaders and inflation was reduced.
Historical examples
- Israel on February 24, 1980 under Menachem Begin , 10 Israeli pounds became 1 shekel . Ratio 1:10
- Israel on July 4, 1985 under Shimon Peres , 1000 shekels (IS) became 1 new Israeli shekels (NIS). Ratio 1: 1000
- Italy on January 1, 1987 under Bettino Craxi , 100,000,000 Italian lira became 100,000 lira. Ratio 1: 1000
- Europe exchanged national currencies for euro on January 1, 1999 as book money and three years later on January 1, 2002 as cash . Ratio of 1 Euro = 1.95583 German marks
- Turkey on January 1, 2005 under Recep Tayyip Erdoğan were changed from 1 000 000 Turkish Lira (TL) to 1 Yeni Turk Lirasi (YTL), a new Turkish Lira. Ratio 1: 1,000,000
Individual evidence
To be distinguished from
- Debt relief ("haircut")