The Romanian government has approved a draft regulating the re-denomination of the local Lei currency from July 2005.

According to the draft, four zeros will be cut with the Leu 1,000,000 banknote being replaced with the Leu 100 banknote.

The existing coins and banknotes will be valid in circulation until December 2006. Following that date only the new banknotes and coins will be accepted.

The measure aims to simplify the payment system and to reduce cash in circulation.

Once the draft has been approved by the country's parliament, and the re-denomination process started, retailers will have to post prices in both the new system and the old one.

(NewsBase 24.v.04)