What is the Currency of Greece?

By Sharon Omondi on August 14 2019 in Economics

For currency, Greece uses the Euro.

The monetary unit for Greece is the euro whose sign is €. The euro banknotes exist in seven denominations: 5, 10, 20, 50, 100, 200, and 500. The circulated euro coins exist in denominations of 1 euro and 2 euro, and the cents are in denominations of 1, 2, 5, 10, 20, and 50. The euro can be used in all the eurozone member states with no need for currency exchange.

History of Greek Currency

Prior to the use of the euro as the currency in Greece, drachma was used as the currency. Drachma was introduced in 1932 and symbolized by the sign ₯. The word was derived from a verb that meant “grasp.” In Ancient Greece, a “grasp” six metal sticks (obeloί) which were used as a currency to facilitate trade. The use of the metal sticks is evidenced by the 150 obeloί displayed as part of Greek’s history at the Museum of Athens. Greek cities that used drachma include Kos, Thasos, Chios, Athens, Abdera, Ephesus, Pella, Sparta, Tarsus, Troy, and Abydos among others. The most widely used coin in Greece was called the Athenian tetradrachm which was commonly referred to as the “owl.” In addition, many world currencies derived their names from the word drachma such as the Armenian Dram, Moroccan dirham and United Arab Emirates’ dirham. An estimated value of drachma in the 5th Century was US$25 which is equivalent to US$46.50 in 2015. The denominations of the ancient dirhma were obol, tetrobol, diobol, didrach, tetradac, and dekadrac.

Adoption of the Euro by Greece

Greece made an application to join the eurozone in 1999. The country joined the eurozone in January 2001 after being scrutinized and confirmed to have met the convergence criteria. Subsequently, the euro was adopted as the new Greek national currency just like other members of the eurozone. However, the physical currency became available to the Greeks a year later in January 2002. Afterwards, the eligible drachmas were exchanged for euros at a rate of ₯340.75 for every €1. At the time of the euro currency adoption, the denominations of the coins in circulation were 50 lepta, and 1, 2, 5, 10, 20, 50, 100, and 500 drachmae. The banknote denominations were 10,000-, 5,000-, 1,000-, 500, 200 and 100 drachmae.

Public Reception

Most Greeks were positive about the adoption of the euro as the new Greek currency. This was until 2005 when the value of the currency dropped by 26% in February and depreciated by another 20% in June. The future of the euro was uncertain at the time. However, since 2010 the value of the euro has been appreciating. Thus, the citizens of Greece have restored their confidence in it.

Exchange Rate of the Euro and the Dollar

As of June 27, 2017 the exchange rate is 1 euro being equal to 1.1275 US dollars. The two currencies are very competitive, however, the value of the euro is still higher than that of the dollar.

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