Annulment of Currency

annulment by the state of sharply devalued paper money. The withdrawal of money may be a consequence of runaway inflation, or it may result from the need to withdraw paper money that has ceased to be a legal means of payment because of a change in political power. It is a way of stabilizing monetary circulation. Annulment of currency sometimes coincides with devaluation, where depreciated old money is exchanged for new money at a very low rate. For example, under the monetary reform in Germany in 1924, the new mark was exchanged for 1 trillion old marks. During the Civil War and foreign intervention in the USSR in 1918–20, the Soviet government annulled the paper money issued by the White Guard governments. At the end of World War II the occupation money issued by the states of the fascist bloc was annulled in the countries liberated from the fascists. In Greece, for example, in November 1944 the government decreed the annulment of the currency: 50 billion old drachmas exchanged for one new drachma.