How did Romania manage to save its currency in the 2000s by just dropping the last couple of zeros? Wouldn’t other countries be able to do the same?
In: 138
Every country can denominate, but it does basically nothing. If a US dollar costs 1,000,000 of your currency and you make 1,000 per hour, you need 1,000 work hours to buy one dollar. Say you denominate by a factor of 1,000, now you earn 1 unit of your currency per hour, and a dollar costs 1,000 – it still takes you 1,000 hours to earn a dollar. Nothing has changed for you, apart from the amount of zeroes on your bank notes.
Latest Answers