What is the Currency of Moldova?
Moldova is a lower to middle income country which has the smallest economy in Europe. However, in the past two decades, the country has made efforts in curbing poverty and developing its economy. The annual growth of the economy is about 5% which is driven by local consumption and remittance from overseas. According to the World Bank, remittance account for 25% of the GDP. Moldova is benefiting from trade ties with several countries among them a free trade agreement with the EU that was signed in 2014. The political system of the country is considered vulnerable, its society is polarized, and is affected by climatic related shocks such as famine, drought, and floods. Unaccountability and rampant corruption are among the economic problems thriving in the country. A massive public debt and unconducive business environment led to a fallout with the IMF; the relationship was restored in late 2016 after both parties reached an agreement and Moldova was eligible for external funding for its budget. The official currency used is the Moldovan leu.
The Republic of Moldova recognizes the Moldovan Leu (MDL) as its official currency. The National Bank of Moldova is responsible for managing the production, circulation, and stability of the currency, and is answerable only to the parliament of Moldova.
The Evolution of Currency in Moldova
Between 1918 and 1944, Moldova was part of the Romanian territory and recognized the Romanian Leu as its currency. Moldova sought independence from Romania on November 29, 1993, after the Soviet Union collapsed in December of 1991. It successfully replaced the Romanian Leu with the cupon at par between 1992 and 1993 before replacing the cupon with the Moldovan Leu at a rate of 1 Leu = 1,000 Cupon. Transnistria, an autonomous region seeking independence from Moldova, does not use the Leu as its currency but instead uses the Transnistrian Ruble. The state is not recognized by the international community including the world bank, the IMF, the UN, and Moldova.
Moldovan Leu Coins
One Moldovan leu consists of 100 bani (cents). In November 1993, the first coins made of aluminum were minted and circulated in the denominations of 1, 5, 10, 25, and 50 cents. Nickel-Plated-Steel coins in denominations of 1 and 5 leu coins were also circulated. The 50-cent aluminum coins and the 1 and 5 leu coins were later removed from circulation, and in 1998 a new brass-clad steel 50-cent coin was introduced. The 1- and 5 leu coins were never introduced back into circulation, but they remain legal tender and hard to come by. Since 1996, several commemorative coins have been issued by the National Bank of Moldova for collection purposes only.
Moldovan Leu Banknotes
There have been two series of the Moldovan leu Banknotes. The first series was in denominations of 1, 5, and 10 lei, and was short lived. The second series of the notes are used today and are in denominations of 1, 5, 10, 20, 50, 100, 200, 500, and 1000 lei. The observe side of the note portrays a portrait of Ștefan cel Mare who was the prince of Moldavia from 1457 to 1504.