Business, Legal & Accounting Glossary
D-Mark or Deutsche Mark (DM) was Germany’s official currency until the euro became the currency of choice in 1999. D-Mark was replaced by the euro in circulation from that year. However, Deutsche Mark was accepted as legal payment of purchases made inside Germany until February 28, 2002.
D-Mark came into circulation from June 21, 1948, during Allied occupation of West Germany after World War II. It replaced existing currency Reichsmark (RM) at an exchange rate of 1DM=1 RM. Introduction of the new currency was made through a careful process. Each German citizen received a per capita allowance of 60 DM in two portions: first portion consisted of 40 DM, second portion consisted of 20 DM. Deutsche Mark was introduced in order to protect the fledgeling West German economy from the specter of hyperinflation. It also effectively stopped black market trade in post-war years.
One D-Mark was fractioned into 100 Pfennig. DM notes were of following denominations: 200 DM, 100 DM, 50 DM, 20 DM and 10 DM. 5 DM, 500 DM and 1000 DM banknotes were also in circulation. D-Mark was issued by Deutsche Bundesbank.
D-Mark quickly earned an enviable reputation as a stable currency in the 1950s. Currency epitomized Germany’s growing prosperity post-World War II. Bundesbank took a determined ‘hard’ monetary policy compared to other central banks in Europe. German bank followed a strict stand against political interference and inflation. DM was so successful in containing inflation that a substantial portion of Germans favours a re-introduction of currency from the present euro even today.
According to the European Central Bank (ECB)value of D-Mark has been fixed as 1 euro = DM 1.95583. This rate is effective from January 1, 1999.
Bundesbank is Germany’s central bank. It is presently part of European central banking.
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This glossary post was last updated: 26th March, 2020 | 2 Views.