redenominated

Redenomination is a monetary reform in which a country's unit of account is changed and the monetary system is reorganized around a new unit. Typically a fixed conversion rate is used to replace the old currency with the new one, and the old notes and coins are phased out. Redenomination is distinct from inflationary devaluation; it is primarily a change in how money is counted rather than a direct policy to alter prices.

Common reasons include hyperinflation, currency crises, or a desire to restore decimalization and public confidence. The government sets a legal exchange rate, issues new notes and coins, and designates a transition period during which both currencies operate. Prices, wages, taxes, and contracts are often re-denominated, sometimes with rounding rules to ease adjustment. The old currency is exchanged at the central bank.

Effects: While it can simplify accounting and improve credibility, redenomination does not by itself stabilize the economy or eliminate inflation. It can impose short-term costs to the government and the public, including printing costs, contract renegotiations, and confusion during the transition. In some cases, citizens may respond by accelerating or delaying spending.

Examples include Turkey in 2005, Russia in 1998, and Brazil in the 1990s, among others in Latin America and Eastern Europe. In each case, redenomination was part of a broader stabilization package or restructuring of the monetary regime.