Redenomination

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Redenomination

A reduction in the face value of a currency that a government or central bank makes because of hyperinflation or chronic weakness as a currency. For example, a country may declare that a "new" dollar is worth 1,000 "old" dollars and print new denominations reflecting this change. This may or may not stem the tide of inflation, depending on how the redenomination is approached and what other steps are taken.
References in periodicals archive ?
582-million Philippine Par Bond redenominated into 28.
In addition, all legal-tender laws should be abolished, and all contracts should be redenominated in USD at the appropriate conversion rate.
Ghana redenominated its currency in July 2007: figures from 2004-2007 and 2008-2012 are reported in the old cedis ([?
to guarantee payment of the redenominated bonds and loans; i.
This was redenominated in 2007 to make it easier to transact business generally.
The Irish money supply was redenominated in euro at the fixed conversion rate of 1 euro = IR 0.
30) These fears were realized when savings accounts were frozen in December of that year, and dollar-based accounts were redenominated into highly devalued pesos.
FSA Chairman Adair Turner said Britain's banks needed to think about problems arising from their assets and liabilities being redenominated into another currency, even though the likelihood of this happening was still small.
If there is any hint that other countries may follow in the wake of Greece, agents would become unwilling to make contracts that may be redenominated and we would expect bank runs in the other vulnerable economies.
If there were to be an exit, a redenominated Greek currency would likely trigger a default in Greece that "would materially weaken" the solvency of Cyprus' banks, Moody's said.
If Greece leaves the monetary union, its banks will have to be forcibly redenominated into the new national currency (presumably a new drachma)," UBS added.
Such a move by Athens could cause bank customers in other countries to fear that their money could one day be redenominated in a much weaker currency.