Currency reform

the term currency reform designates a change of relevant characteristics of a currency. A currency reform in most cases consists of a conversion of old currencies to a nationally specified rate of exchange in units of the new currency. Often thereby different exchange rates applyfor cash, bank assets and commitments. Only if a simple conversion of all prices and values takes place to a uniform course, then one speaks also of a currency reform. Usually also a change of the name is with a currency reformthe currency connected. The extreme case of a currency reform is the introduction of the currency of another country (Dollarisierung, Euroisierung). The beginning and the end of each currency are always marked by a currency reform.

In Germany the term becomes often alsoas synonym for the introduction of the D-mark uses 1948.

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reasons for currency reforms

currency reforms are accomplished from a set of reasons:

  • Completion of a current hyperinflation: Countries, which exhibit high inflation rates, those it by the other means of the money and Monetary policy gentleman to become to be able, often do not try, to terminate by the psychological means of a new start the confidence loss into the own (old) currency. The again introduced currency will provide creating measures then frequently with additional, reliability - for example a firm rate of exchangeto a price-stable currency, an independent central bank o. A. Examples of such a currency reform are Argentina 1991 and Germany 1923 (S. and).
  • Removal of the negative effects of earlier inflations: Countries to suffer in the past from durably high inflation rates, feel the long-term effects of the inflation had v. A. in the form of high, intransparenten prices, D. h. Units of a relatively worthless property cost already comparatively many monetary units. This causes high transaction costs, there the price markings due to their extent for thatOfferer by goods aufwändig and for the Nachfrager to be intransparent. Remedy creates here the introduction of a new currency, with which in relation to the old currency often simply several zeros (Henning) are removed. Examples of a such currency reform are the introductionthe new Turkish Lira 2004 or the French currency reform 1960.
  • Political reasons for the introduction of a new currency: In rarer cases it comes also from political reasons to currency reforms. Step currency areas another country with (example: That joins 1990 ) or countries break GDR to the FRG apart (example: Czechoslovakia 1993), then comes it to currency reforms.
  • Economic reasons in accordance with the theory of optimal currency areas: In recent time increase other economic reasons than inflations play a role with thatIntroduction of new currencies. A prominent example for this is the introduction of the euro 1999; the European currency was introduced beside political also for economic reasons, in order the transaction costs of the trade between European Union - countries to reduce.

currency reforms inGermany

the currency reform 1923

the conversion of the German Reich of the “Mark” (m) on the” pension Marks “(later” realm Marks “, RM) terminated a galloping inflation and was the most remarkable and at short notice most successful German currency reform at all,with a course by,000 M: 1 RM.

Formular 1948
Form 1948

the currency reform 1948

in Germany becomes with the term usually the introduction of the German Mark (DM) in “West Germany” (D. h. in that English, American one and French zone of occupation)to 20. June 1948 connected. Here each person in two steps immediately 40, - DM and somewhat later 20, - DM were bar disbursed;

  • Debts converted with the course 10 realm Marks (RM) to 1 DM (10: 1) changed over;
  • Wages and rents howeverwith the course 1:1;
  • Cash was exchanged to the course 100 realm Marks to 6.50 DM.

The new volume of money lay in the months after the currency reform with approximately 13 billion DM (M3, without and Buchgeld).

This currency reform was inpositive sense most salient collective experience of the West German post-war period after 1945, above all, because Ludwig Erhard connected it with the nearly complete abolition of the “managements” (rationing) of the goods of the everyday life need: “On a mark there was everything!“The currency reformwas by to 23. July 1947 by the economic council of the Bizone created special place “money and credit” in bath Homburg prepared, under the direction of Ludwig the Erhard stood. The last refinement became in the spring 1948 under strictest secrecy inthe buildings of the Fritz Erler barracks to Rothwesten (district Kassel) decided.

Since the currency new creation of the German Marks came so suddenly and only in the “west zones”, whole remaining realm Mark flowed the cash into the Soviet zone of occupation, where it there inquiringworked, so that because of the price increase resulting from it (further) a galloping inflation threatened there.

The currency reform strengthened the conflict between the USSR and the Western powers, already existing, so that it was among other things (more welcomely) cause for the intensification of the Berlin blockade.

In that Soviet zone of occupation takes place thereupon a currency reform of 24. to 28. June on the “Marks of the German issuing bank” (MDN), with which a success experience was void similarly in the western zones of occupation.

introduction of the D-mark in the GDR 1990

In the context of the introduction of the German Marks in the GDR in the apron of the reunification different kinds of funds with different sentences were exchanged (1: 1, 2:1).

introduction of the euro 1999/2002

the introduction of the euro to 15 States of thatEuropean union was no currency reform, but only one currency reform, since all money existing to end 1998 were changed over directly over the official euro-rate of exchange in euro, without losing or win thereby at value. Since that the currencies are thatEuro-countries firmly coupled to the euro, them are only different accounting units of the euro.

The euro applies since the year 1999 as Buchgeld, it became at the 1. January 2002 as cash imported. Since the cash introduction the old currencies of the euro-countries havetheir characteristic as legal tender lost. Notes and coins were drawn in and can be exchanged in some countries also still for an unlimited period in euro. Cashless monetary values became automatically to at the latest 1. January 2002 changed over to euro.

A reform of the monetary system foundonly to that extent instead of that the national issuing banks their self-sufficiency lost and instead the task of an issuing bank took over the European central bank.

currency reforms in Austria

see: Currency reforms in Austria


Siegfried Freick, the currency reform 1948in West Germany. Switch position for a half century, Schkeuditzer book publishing house, Schkeuditz 2001

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