Some countries resort to currency replacement to curb excessive inflation rates or break away from a bygone era, but the strength of the new currency remains dependent on the country’s ability to support it.
In the world, there are many models of currency exchange according to the following:
- Replacing the currency for the purposes of getting rid of the legacy of regimes, especially in Iraq in the early new millennium and Libya in 2011. There are also expectations for the experience to be repeated in Syria after the fall of Bashar al-Assad’s regime.
- Replacing the currency as a means of extending influence and control over areas within the country, especially in Yemen and Sudan recently.
- The currency may be replaced completely by issuing a new currency in all its denominations or new denominations, or partially by simply changing some banknotes and keeping others according to the requirements of the circumstances.
- Getting rid of hyperinflation by issuing a currency that has a value greater than the canceled one, as in the Sudanese case.
- There are other geopolitical motives for replacing the currency, such as the actions taken by countries that broke away from the collapsed Soviet Union for which the ruble was no longer suitable, and in contrast to them, the euro zone countries that abolished their currencies to adopt the unified currency of the economic bloc.
Below are some Arab and international models that have taken this step:
Iraq
The official page of the Central Bank of Iraq published an updated list of withdrawn currencies, most of which include pictures of the late President Saddam Hussein, most notably as follows:
- 50 dinars (issued in 1991).
- 100 dinars (1991 issue).
- 5 dinars (1992 edition).
- 10 dinars (1992 edition).
- 50 dinars (1994 edition).
- 250 dinars (1994 issue).
- 10 thousand dinars (2002 issue).
The step confirms the keenness of the emerging political system after 2003 to erase the impact of the previous Iraqi regime on it.
Yemen
Yemen used one currency during the era of the late President Ali Abdullah Saleh under the 1990 unity agreement, but after the division of areas of control between the Houthis and the internationally recognized government, there became two central banks.
In 2016, the Central Bank in Aden began printing denominations of currency throughout Yemen.
The Houthis prevented the circulation of the new currency in areas under its control, as they considered it counterfeit and illegal, and began confiscating it from citizens, according to a report published by the American Carnegie Research Center.
On March 30, 2024, the Governor of the Central Bank in Sana’a (controlled by the Houthis), Hashem Ismail, announced the issuance of a 100 riyal coin, with its circulation starting on Sunday, March 31, 2024.
He added that this issuance will be followed by the issuance of coins for denominations less than 100 riyals, explaining this by the longer lifespan of coins compared to paper currencies.
On the other hand, the Central Bank of Aden (the area controlled by the internationally recognized government) warned against dealing in this new currency, “fake and issued by an illegal entity,” as it described it, considering it “a means of robbing the financial assets of financial, banking and commercial institutions and the pockets of citizens.”
On May 30, 2024, the Central Bank in Aden published an announcement in which it said: “All individuals, shops, companies, other parties, and financial and banking institutions who hold old-issue pre-2016 paper money of various categories must quickly deposit it within a maximum period of 60 days from Date of this announcement.
The Carnegie Center warned of “the consequences of this economic division in Yemen, where there are now two different riyals, as this may lead to the destruction of the banking sector.”
Sudan
In 1992, the regime of former Sudanese President Omar Hassan al-Bashir, who came to power after a military coup, took the decision to replace the local currency with the dinar instead of the pound.
The decision was implemented in northern Sudan smoothly, while the southern rebels continued to deal in the Sudanese pound.
The Sudanese dinar was equivalent to 5 Sudanese pounds, and its application may have come in the context of the Islamic orientations of Al-Bashir’s government or to tighten the siege on the southern rebels.
In January 2007, the government of Sudanese President Omar Hassan al-Bashir decided to reintroduce dealing in the pound again after an absence of more than 15 years before that date, during which the dinar it had chosen before was circulated, according to what was called the policy of economic consolidation, thus implementing what was stated in the The Naivasha Peace Agreement that ended the civil war that had lasted for more than 20 years.
President Omar Al-Bashir launched dealing in the new pound with a value equal to 100 dinars or a thousand of the old pound.
As for the present time, the Central Bank of Sudan recently announced the replacement of the currency in denominations of 500 and 1,000 pounds, starting from the tenth of December 2024 until the 23rd of the same month in 6 states including the Red Sea, Kassala, Gedaref, River Nile, Northern, and Blue Nile. .
The Central Bank of Sudan, in a statement last June, attributed this step to the spread of large quantities of currencies of unknown origin and non-compliant with technical specifications, in denominations of 1,000 pounds and 500 pounds. This led to a clear increase in the level of cash liquidity and had a negative impact on the stability of the general level of prices.
Apparently, the real goal behind the replacement process is the Sudanese government’s desire to use the currency and its international legitimacy to withdraw the value of funds held by the Rapid Support Forces in areas under its control, where the two sides are engaged in an intense war.
Libya
In late 2011, the Central Bank of Libya announced that the local currency currently in circulation would be changed to a new currency that did not bear pictures and drawings of the late Colonel Muammar Gaddafi, who was overthrown by the revolution. A public competition was then announced to develop designs for the new currencies according to conditions and specifications set by the bank.
In November 2012, the Central Bank of Libya announced that it would begin circulating the country’s new currency at the end of January 2013, in denominations that would include the dinar, 5 and 10 dinars, and 20 and 50 dinars.
The Governor of the Central Bank at the time, Al-Siddiq Al-Kabir, explained, on the sidelines of the meeting of the Board of Directors of the Central Bank in the city of Sebha, that the bank had begun since the first of October 2012 to withdraw the fourth and fifth issues of the paper currency in denominations of 5 dinars and 10 dinars, provided that the withdrawal process would continue according to the methodology that Approved by the Bank’s Board of Directors.
On the first of last December, the Central Bank of Libya in Tripoli announced that it had contracted to print 30 billion dinars to pump into the banking sector and resolve the cash shortage crisis, according to the Libyan News Agency.
He pointed out that the $30 billion will be pumped into the banking sector – instead of the currency that will be withdrawn – smoothly according to a time plan that was included in advance.
This comes in light of the political stalemate between the internationally recognized Tripoli government and the government of Osama Hammad, supported by Parliament and retired Major General Khalifa Haftar in the east.
Commenting to Reuters on the decisions of the Central Bank in Tripoli, she said that Libya has been suffering from a shortage of liquidity for years, as citizens have been forced to stand in long lines outside banks to obtain cash and salaries since the fall of Muammar Gaddafi’s regime in 2011.
In July 2024, the British agency quoted unnamed sources as saying that counterfeit Libyan dinars were circulating in eastern Libya and being replaced by real dollars, leading to an increase in the collapse of the local currency.
Somalia
In December 2024, the president of Puntland state in northeastern Somalia, Said Abdullahi Deni, announced plans to issue a new regional currency by 2025, with the aim of boosting the state’s economy, according to the New Somali News Agency.
He pointed out that “the new currency will fit into the Somali financial system in the future, as part of the state’s endeavor to achieve greater economic independence.”
Tunisia
On March 27, the Central Bank of Tunisia launched a new 10-dinar banknote bearing the image of the first Tunisian female doctor, Tawhida Ben Sheikh, in honor of the progress of all Tunisian women in the scientific and medical fields.
In July 2024, the Central Bank of Tunisia introduced 3 new 2-dinar coins, 100-millime denominations, and 50-millime denominations.
Soviet Union countries
The disintegration of the Soviet Union in 1991 led to some of the countries that were subordinate to it resorting to changing the ruble currency to consolidate the meaning of independence, the most prominent of which are the following according to the International Monetary Fund in 1993.
- Azerbaijan: manat.
- Estonia: Crohn’s.
- Georgia: Larry.
- Kyrgyzstan: sum.
- Lithuania: Litas (before the euro was declared an official currency in 2015).
- Turkmenistan: manat.
euro
The official website of the European Union stated that 20 countries of the Old Continent bloc use the euro as an official currency, according to the following:
- Austria: The euro began to be used instead of the shilling since 2002
- Belgium: The euro began to be used instead of the franc since 2002
- Croatia: The euro began to be used instead of the kuna from 2023
- Cyprus: Started using the euro instead of the pound since 2008 (the pound is still used in Northern Cyprus)
- Estonia: I started using the euro instead of the krone in 2011
- Finland: The euro began to be used instead of the mark since 2002
- France: The euro began to be used instead of the franc since 2002
- Germany: I started using the euro instead of the mark since 2002
- Greece: The euro began to be used instead of the drachma in 2001
- Ireland: The euro has been used instead of the Irish pound since 2002
- Italy: The euro began to be used instead of the lira in 2002
- Latvia: I started using the euro instead of the lat since 2014
- Lithuania: I started using euros instead of litas since 2015
- Luxembourg: The euro began to be used instead of the franc since 2002
- Malta: The euro began to be used instead of the lira in 2008
- Holland: I started using the euro instead of the gold since 2002
- Slovakia: I started using the euro instead of the krone in 2009
- Slovenia: I started using euros instead of tolars since 2007
- Spain: The euro began to be used instead of the peseta in 2002
