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Aside

Money exchange:Zwangsumtausch 70’s

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International exchange

The East German mark was officially valued by the East German government at parity with the (West German) Deutsche Mark, but it was never freely convertible. Beginning in 1964, the East German government instituted a Zwangsumtausch (forced exchange) (or Mindestumtausch — minimum exchange), whereby most visitors from non-socialist foreign countries were required to exchange a set amount of Deutsche Mark (or other hard currencies) for East German marks at the ratio of one Deutsche Mark to one East German mark for every day of their stay. Starting on 13 October 1980, Western visitors to the GDR  were required to exchange a minimum of 25 Deutsche Mark for East German marks per day. Some exceptions were authorized: for example, tourists who booked hotel stays in the GDR that were paid in hard currency were exempted from the minimum exchange requirements. (Of course, such accommodation charges almost always exceeded the 25 mark daily exchange threshold.) At other times, West Berliners, retirees, children, and youth were granted either exemptions or were authorized reduced minimum exchange amounts. Members of the Western Allied military forces stationed in West Berlin were also exempt from these rules when visiting East Berlin, in part because the Western Allies did not recognize the authority of the GDR to regulate the activities of their military personnel in East Berlin; only the Soviet Union was considered competent to do so.

Inner German border 1985

Inner German border 1985 (Photo credit: Hardo)



20 Mark coin featuring Karl Marx, 1988

Occupied Berlin, territorial exchange visible ...

Occupied Berlin, territorial exchange visible at the western rim (Photo credit: Wikipedia)

On the black market, the exchange rate was about 5 to 10 M to one DM. In the mid-1980s, one could easily visit foreign currency exchange offices in West Berlin and purchase East German banknotes (in 50 and 100 mark denominations) at the rate of 5 (East) = 1 (West). However, the GDR forbade the import or export of East German currency (as well as the currencies of other socialist countries) into or out of the GDR, and penalties for violation ranged from confiscation of smuggled currency to imprisonment. The East German mark could not be spent in Intershops to acquire Western consumer goods;

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One response

  1. Yes, I know this is a scrape. It’s so obvious do I really need to say it?

    October 12, 2010 at 10:13 pm

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