Denomination (currency)
   HOME

TheInfoList



OR:

Denomination is a proper description of a
currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general ...
amount, usually for
coin A coin is a small, flat (usually depending on the country or value), round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in order t ...
s or
banknote A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand. Banknotes were originally issued ...
s. Denominations may also be used with other means of payment such as
gift card A gift card also known as gift certificate in North America, or gift voucher or gift token in the UK is a prepaid stored-value money card, usually issued by a retailer or bank, to be used as an alternative to cash for purchases within a parti ...
s. For example, ''five euros'' is the denomination of a five-euro note.


Subunit and super unit

In a currency, there is usually a main unit (base) and a subunit that is a fraction of the main unit. In some countries, there are multiple levels of subunits. In the former
Ottoman Empire The Ottoman Empire, * ; is an archaic version. The definite article forms and were synonymous * and el, Оθωμανική Αυτοκρατορία, Othōmanikē Avtokratoria, label=none * info page on book at Martin Luther University) ...
, 1 lira = 100
kuruş Kuruş ( ; ), also gurush, ersh, gersh, grush, grosha, and grosi, are all names for currency denominations in and around the territories formerly part of the Ottoman Empire. The variation in the name stems from the different languages it is us ...
= 4000 para = 12000 akçe. Today, only a few places have more than one subunit, notably the Jordanian dinar is divided into 10 dirham, 100 qirsh/piastres, or 1000 fils. Many countries where
Western Europe Western Europe is the western region of Europe. The region's countries and territories vary depending on context. The concept of "the West" appeared in Europe in juxtaposition to "the East" and originally applied to the ancient Mediterranean ...
an languages are spoken currently have their main units divided into 100 subunits. Some currencies that previously had subunits no longer do, because
inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...
has rendered the subunit useless. A prominent example is the Japanese yen, which was formerly divided into 100 sen or 1000 rin. Both subunits were demonetized at the end of 1953. Occasionally, a super unit is used as a multiple of the main unit. Examples include
Korea Korea ( ko, 한국, or , ) is a peninsular region in East Asia. Since 1945, it has been divided at or near the 38th parallel, with North Korea (Democratic People's Republic of Korea) comprising its northern half and South Korea (Republic o ...
n won = 5
yang Yang may refer to: * Yang, in yin and yang, one half of the two symbolic polarities in Chinese philosophy * Korean yang, former unit of currency of Korea from 1892 to 1902 * YANG, a data modeling language for the NETCONF network configuration ...
in 1893,
Iranian toman The Iranian toman ( fa, تومان, tūmân, pronounced ; from Mongolian ''tümen'' "unit of ten thousand", see the unit called tumen) is a superunit of the official currency of Iran, the rial. One toman is equivalent to 10,000 rials. Although t ...
=10 rials (used informally today). In the
Ottoman Empire The Ottoman Empire, * ; is an archaic version. The definite article forms and were synonymous * and el, Оθωμανική Αυτοκρατορία, Othōmanikē Avtokratoria, label=none * info page on book at Martin Luther University) ...
, lira and kuruş were super units at some point before becoming the main unit. In the Indian subcontinent, it is common in Hindustani, as well as in both
Indian Indian or Indians may refer to: Peoples South Asia * Indian people, people of Indian nationality, or people who have an Indian ancestor ** Non-resident Indian, a citizen of India who has temporarily emigrated to another country * South Asia ...
and
Pakistani English Pakistani English (also known as Paklish or Pinglish) is the group of English language varieties spoken and written in Pakistan. It was first so recognised and designated in the 1970s and 1980s. Pakistani English (PE), similar and related to ...
for large amounts of money to be discussed in lakhs and crores rather than in rupees. While they are not official denominations, they are drawn from the customary numerical system and are widely understood and utilised in the Indian, Pakistani, and Nepalese financial systems.


Decimal vs. non-decimal

A
decimal currency Decimalisation or decimalization (see spelling differences) is the conversion of a system of currency or of weights and measures to units related by powers of 10. Most countries have decimalised their currencies, converting them from non-decimal ...
is a currency where the ratio between the main unit and the subunit is an integral
power Power most often refers to: * Power (physics), meaning "rate of doing work" ** Engine power, the power put out by an engine ** Electric power * Power (social and political), the ability to influence people or events ** Abusive power Power may a ...
of 10.
Non-decimal currencies A non-decimal currency is a currency that has sub-units that are a non-decimal fraction of the main unit, i.e. the number of sub-units in a main unit is not a power of 10. Historically, most currencies were non-decimal, though today virtually all ...
are now rare but had some advantages in daily life transactions. For example, 1
South German Gulden The South German Gulden was the currency of the states of southern Germany between 1754 and 1873. These states included Bavaria, Baden, Württemberg, Frankfurt and Hohenzollern. It was divided into 60 kreuzer, with each kreuzer worth 4 pfennig o ...
= 60
Kreuzer The Kreuzer (), in English usually kreutzer ( ), was a coin and unit of currency in the southern German states prior to the introduction of the German gold mark in 1871/73, and in Austria and Switzerland. After 1760 it was made of copper. In s ...
. 60 can be divided into 2, 3, 4, 5, 6, 10, 12, 15, 20 or 30 parts that are still
integer An integer is the number zero (), a positive natural number (, , , etc.) or a negative integer with a minus sign ( −1, −2, −3, etc.). The negative numbers are the additive inverses of the corresponding positive numbers. In the languag ...
s, making pricing easy. This advantage (in an age without mechanical or electronic calculators) and the lack of widespread accurate weighing apparatus (meaning an item might sometimes simply be divided in 2,4,5 etc.) coupled with tradition were the reasons why non-decimal currencies were used. In theory, two countries currently use non-decimal currency: Mauritania (1 ouguiya = 5 khoums) and Madagascar (1
ariary The ariary (sign: Ar; ISO 4217 code MGA) is the currency of Madagascar. It is notionally subdivided into 5 ''iraimbilanja'' and is one of only two non-decimal currencies currently circulating (the other is the '' Mauritanian ouguiya''). The names ...
= 5 iraimbilanja). In practice, however, the value of the main unit in each case is so low (less than 1/1000 of a United States dollar) that the sub-unit is not of any practical use and is rarely seen in circulation. In the case of the iraimbilanja, this is a carryover of the Madagascar's previous currency, the Malagasy franc, which had the ariary as a super unit worth 5 francs, and iraimbilanja was an alternate term for the franc. The last major countries to use non-decimal currencies in practice were the United Kingdom (until 1971), Ireland (1971), Malta (1972) and Nigeria (1973). The "optimal denomination problem" is a problem for people who design entirely new currencies: What denominations should be chosen for the coins to minimize the average effort required to change into smaller denominations. As of 2014, most decimal currencies use a
1-2-5 series In industrial design, preferred numbers (also called preferred values or preferred series) are standard guidelines for choosing exact product dimensions within a given set of constraints. Product developers must choose numerous lengths, distanc ...
of coins, but some other set of denominations would require fewer denominations of coins or a smaller average number of coins to make change or both.


Choice of name

It is common to name a unit with a
unit of weight A unit of measurement is a definite magnitude (mathematics), magnitude of a quantity, defined and adopted by convention or by law, that is used as a standard for measurement of the same kind of quantity. Any other quantity of that kind can ...
, such as pound, lira, and
baht The baht (; th, บาท, ; sign: ฿; code: THB) is the official currency of Thailand. It is divided into 100 ''satang'' (, ). The issuance of currency is the responsibility of the Bank of Thailand. SWIFT ranked the Thai baht as the 10th-m ...
. In most cases, these currencies were originally defined as that amount of some precious metal. Another choice of name is some form of derivative of the political entity. The
Afghan afghani The afghani ( sign: or Af (plural: Afs) code: AFN; Pashto: ; Persian : ) is the currency of Afghanistan, which traditionally is issued by the nation's central bank called Da Afghanistan Bank. It is nominally subdivided into 100 '' puls'' (پ ...
and European
euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...
fall into this category. Sometimes the name is simply the name of the metal of which the coins were or are made, such as
Polish złoty The złoty (; abbreviation: zł; ISO 4217, code: PLN) is the official currency and legal tender of Poland. It is subdivided into 100 Groschen, grosz (''gr'').Singular: ''grosz'', alternative plural forms: ''groszy'', ''grosze''. The widely recog ...
(“golden”) and
Vietnamese đồng The dong ( Vietnamese: ''đồng'', Chữ Nôm: 銅) (; ; sign: ₫ or informally đ in Vietnamese; code: VND) has been the currency of Vietnam since 3 May 1978. It is issued by the State Bank of Vietnam. The dong was also the currency of the pr ...
(“copper”), or its geographical origin, e.g. Joachimsthaler (see
Dollar Dollar is the name of more than 20 currencies. They include the Australian dollar, Brunei dollar, Canadian dollar, Hong Kong dollar, Jamaican dollar, Liberian dollar, Namibian dollar, New Taiwan dollar, New Zealand dollar, Singapore dollar, ...
).


See also

* Chronic inflation *
Denomination (postage stamp) In philately, the denomination is the "inscribed value of a stamp". The denomination is not the same as the value of a stamp on the philatelic market, which is usually different, and the denominations of a country's stamps and money do not neces ...
*
Devaluation In macroeconomics and modern monetary policy, a devaluation is an official lowering of the value of a country's currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national curre ...
* Face value *
Hyperinflation In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as t ...
*
Redenomination In monetary economics, redenomination is the process of changing the face value of banknotes and coins in circulation. It may be done because inflation has made the currency unit so small that only large denominations of the currency are in cir ...


References

{{DEFAULTSORT:Denomination (Currency) Numismatics