Are you planning a trip to Romania or want to invest in the country? One crucial aspect to consider is the Romanian currency. Romania uses the Romanian leu (RON – from Romanian New Currency) as its official currency, which can confuse travellers used to euros, dollars, or other more common currencies.
In this article, we’ll cover everything you need to know about Romania’s currency, including exchange rates, where to exchange money, and tips for using your cash while travelling in Romania. So, whether you’re planning a trip to Bucharest, Transylvania, or any other part of Romania, read on to learn more about the Romanian leu – RON.
What is the Romanian currency?
Before becoming a member of the European Union, Romania turned on July 1, 2005, to “heavy currency” or the new currency – RON. The former 10,000 LEI became 1 RON, the decision with the most significant economic impact on the country.
The official currency of Romania is the Romanian leu (RON), divided into 100 bani. Leu means Lion in Romanian, but it has nothing to do with this splendid animal.
When travelling to Romania, it is essential to familiarize yourself with the current exchange rates to understand the value of this foreign money. As of May 5th, 2023, the exchange rate is approximately 5 RON to EUR. The exchange rate has been relatively stable for a while.
It is also worth noting that exchange rates may vary depending on where you exchange your money, so it is best to research and compare rates before making any transactions. Additionally, many ATMs in Romania allow you to withdraw RON directly from your foreign bank account, which can be a convenient option for travellers. Remember to always carry some cash with you, as some establishments may not accept credit or debit cards. With some preparation and knowledge about the currency, you can easily enjoy your travels in Romania.
How much is one Romanian leu worth in foreign currency?
Today, 1 USD is worth approximately 4,47 RON, while 1 EUR is worth approximately 5 RON. The exchange rate fluctuates daily, so checking the current rate before exchanging any currency is essential. In addition to US dollars, Romanian leu can also be exchanged for euros, British pounds, and other major foreign currencies.
The best option for travellers to check the official currency rankings is to go to BNR – National Bank of Romania’s website, where official rates are displayed. Another recommended platform that helps you know the official exchange rate is cursbnr.ro. It helps you automatically know how much your foreign currency is worth in local money.
It’s important to note that some currency exchange offices may charge a commission fee for exchanging money, so shopping around for the best rates is essential. When travelling to Romania, having a mix of cash and credit cards is also wise, as not all merchants may accept cards. It’s also important to notify your bank and credit card companies of your travel plans to avoid any issues with international transactions.
What coins and banknotes are commonly used for transactions in Romania?
Romania’s currency is the Romanian Leu (RON), which has both coins and notes in circulation. It is essential to know the coins that are commonly used for transactions.
Here is a breakdown of the coins and banknotes you will encounter in Romania:
a. 1 leu
b. 5 lei
c. 10 lei
d. 50 lei
e. 100 lei
f. 200 lei – rarely used, but useful when carrying cash on you
g. 500 lei – not so commonly used
a. 1 ban (not commonly used)
b. 5 bani
c. 10 bani
d. 50 bani
You can find a more detailed breakdown with pictures on the National Bank’s page.
When exchanging your currency for Romanian Leu, it is vital to remember that exchange rates may vary depending on the currency exchange service you use. Doing your research beforehand and comparing rates to find the best deal is best.
In addition, carrying some cash with you when travelling to Romania is recommended, as some establishments may only accept cash payments. However, major credit cards are widely accepted in larger cities and tourist areas.
Are Romanian leu coins and notes accepted as payment in other countries?
Romanian leu coins and notes are not widely accepted as payment in other countries. The Romanian leu is a relatively small currency not commonly traded internationally. However, some currency exchange offices accept Romanian leu, but the exchange rates may not be favourable. It is highly recommended that travellers exchange their Romanian leu for the local currency of the country they visit to avoid any issues. Additionally, it is essential to note that some countries may not even offer currency exchange services for the Romanian leu, so it is best to plan accordingly before travelling. Overall, exchanging your Romanian leu before leaving the country is best to ensure you have the appropriate travel currency. On the other hand, investors could always use their business banks to exchange their money.
How can I exchange Romanian currency for another currency?
If you plan a trip to Romania, you must know how to exchange your Romanian leu coins and notes for another currency. Here are some tips to help you with the process:
1. Find a reputable exchange office: Look for a currency exchange office that has a good reputation and offers competitive rates. Avoid street vendors who may offer better rates but are often involved in fraudulent activities.
2. Check the exchange rates: Before exchanging your money, check the current rates to ensure you get a fair deal. You can use online currency converters or check the rates at the exchange office.
3. Bring identification: Most exchange offices will require some form of identification, such as a passport or driver’s license, to complete the transaction.
4. Separate your coins and notes: Some exchange offices may not accept coins, so separating them from your notes is a good idea. You can try exchanging your coins at a bank or post office.
5. Be aware of fees: Some exchange offices may charge fees or commissions, so understand the terms and conditions before exchanging your money.
Overall, exchanging Romanian leu coins and notes for another currency can be straightforward if you research and choose a reputable exchange office. With these tips, you can ensure that you get a fair deal and enjoy your travels in Romania.
How can I check the current exchange rate for the Romanian leu?
As a traveller visiting Romania, keeping track of the exchange rates for the Romanian leu is essential to ensure you get a fair deal when exchanging your money. Here are a few reliable ways to check the current exchange rate for the Romanian leu:
1. Check the online currency converter: You can use online currency converters to check the current exchange rate for the Romanian leu. These websites update their rates regularly so you can rely on them for accurate information.
2. Visit a bank or exchange office: If you prefer to exchange your money in person, you can visit a bank or exchange office in Romania and ask for the current exchange rate for the Romanian leu. These establishments update their rates daily, so you’ll know you’re getting up-to-date information.
3. Check the news or financial websites: You can also watch financial news websites in Romania, such as Valahia News or Ziarul Financiar, to get an idea of the current exchange rate for the Romanian leu. Also, check this selection of Romanian news platforms. These websites often include up-to-date currency exchange rates so that you can stay informed.
Regardless of your chosen method, keeping an eye on the exchange rates for the Romanian leu is essential to ensure you get a fair deal when exchanging your money. By staying informed, you’ll be able to make the most of your travel budget and have a better travel experience.
Short History of Romanian Currency
A. Pre-Communist Era
The first Romanian currency was the leu, introduced in 1867. It was on the gold standard, and its value was tied to the French franc. During this period, the leu was relatively stable.
B. Communist Era
During the communist era, Romania had two currencies, the “old leu” and the “new leu.” The communist era was characterized by economic instability and hyperinflation. This led to the introduction of the “new leu” in 2005.
C. Post-Communist Era
After the fall of communism, Romania revaluated its currency again, introducing the “third leu” in 2005. Since then, the leu has remained relatively stable with low inflation rates.
Tips and Advice for Travelers Exchanging Money into Romanian Currency
A. Research Exchange Rates
Before travelling to Romania, it’s essential to research the current exchange rates to know how much local currency to bring or exchange.
B. Use ATMs
Using ATMs to withdraw local currency is often the most convenient and cost-effective method. However, be aware of any fees your bank or the local ATM operator charges.
C. Carry a Small Amount of Cash
Carry a small amount of local currency for emergencies or situations where cards are not accepted. However, being cautious and monitoring your belongings when carrying cash is essential.
D. Avoid Street Exchange
Avoid exchanging currency with street vendors, who may offer unfavourable exchange rates or counterfeit money.
E. Monitor Exchange Rates
Monitor exchange rates throughout your trip to ensure you are getting the best rate for your money.
Romanian currency as an opportunity for investors
As an investor, it is crucial to understand the opportunities and risks associated with different currencies worldwide. We will explore the Romanian currency (RON) and how investors can use it.
Economic Factors and RON’s Stability
Romania’s economy has grown steadily in recent years, driven by domestic consumption, foreign direct investment, and a robust export sector. The country’s economic fundamentals, such as a relatively low public debt-to-GDP ratio and a manageable current account deficit, have contributed to the RON’s stability.
Yet, the last months showed a less stable public deficit. It skyrocketed along with Romania’s foreign debt. Besides, the two-figure inflation in the country contributed to a less stable RON. For more economic news from Romania, follow our dedicated economic section.
Interest Rates and Carry Trades
Romania’s central bank, the National Bank of Romania (BNR), has been pursuing a cautious monetary policy, maintaining a relatively higher interest rate than other European countries. This has created opportunities for investors to engage in carry trades, where they borrow in a low-interest-rate currency (e.g., the euro) and invest in higher-yielding RON-denominated assets, such as government bonds or corporate bonds. However, it is essential to consider the risks associated with currency fluctuations and the potential for changes in interest rates.
Assessing the Risks of Betting on RON
Investing in RON can be advantageous due to the potential for high returns from carry trades or capital appreciation in RON-denominated assets. However, investors should also be aware of the risks. Currency fluctuations, driven by political instability, global economic events, or changes in monetary policy, can lead to significant losses if the RON weakens against other currencies.
Investors can use various hedging strategies to mitigate the risks associated with currency fluctuations. One common approach is to use currency forwards or options contracts to lock in a specific exchange rate, protecting the investor from adverse currency movements. Alternatively, investors can diversify their RON exposure by investing in a basket of currencies or assets, reducing the impact of RON-specific risks.
Betting Against RON: Risks and Opportunities
Investors who believe the RON may weaken against other currencies can take short positions in RON-denominated assets or use derivatives such as currency futures or options. This strategy can be profitable if the RON indeed declines in value. However, investors should be cautious, as betting against a currency can also result in substantial losses if the currency unexpectedly strengthens.
In conclusion, the Romanian currency (RON) offers investors various opportunities for potentially high returns through carry trades, capital appreciation, or currency speculation. However, it is essential to consider the risks associated with currency fluctuations and employ appropriate risk management strategies such as hedging or diversification. Investing in the RON can be profitable for well-informed investors, but a comprehensive understanding of the currency’s fundamentals, risks, and opportunities is critical for success.