Three modern Greek currencies were called Drachma, the first introduced in 1832 and the last replaced by the Euro in 2001 (at the rate of 340.751 drachma to the euro).
The drachma was reintroduced in May 1832, shortly before the establishment of the modern state of Greece. It replaced the Phoenix at par. The drachma was subdivided into 100 lepta.
The first coinage consisted of copper denominations of 1, 2, 5 and 10 lepta, silver denominations of 1⁄4, 1⁄2, 1 and 5 drachmae and a gold coin of 20 drachmae. The drachma coin weighed 4.5 g and contained 90% silver, with the 20-drachma coin containing 5.8 g of gold.
In 1868, Greece joined the Latin Monetary Union and the drachma became equal in weight and value to the French franc. The new coinage issued consisted of copper coins of 1, 2, 5 and 10 lepta, with the 5- and 10-lepta coins bearing the names obolos (ὀβολός) and diobolon (διώβολον), respectively; silver coins of 20 and 50 lepta, 1, 2 and 5 drachmae and gold coins of 5, 10 and 20 drachmae. (Very small numbers of 50- and 100-drachma coins in gold were also issued.)
In 1894, cupro-nickel 5-, 10- and 20-lepta coins were introduced. No 1-lepton or 2-lepta coin had been issued since the late 1870s. Silver coins of 1 and 2 drachmae were last issued in 1911, and no coins were issued between 1912 and 1922, during which time the Latin Monetary Union collapsed due to World War I.
Initially, the National Bank of Greece was the sole issuer of bank notes, but the later accessions of the Ionian Islands (1864), Thessaly (1881) and Crete (1897/1913) meant that the note-issuing banks established prior in these territories - the Ionian Bank, the Bank of Epirus and Thessaly and the Bank of Crete, respectively - maintained their note issuing rights. When the Bank of Greece became the successor of the National Bank of Greece in 1928, the other three banks lost their right of note issue and became pure commercial banks.
Between 1926 and 1930, a new coinage was introduced for the new Hellenic Republic, consisting of cupro-nickel coins in denominations of 20 lepta, 50 lepta, 1 drachma, and 2 drachmae; nickel coins of 5 drachmae; and silver coins of 10 and 20 drachmae. These were the last coins issued for the first modern drachma, and none were issued for the second.
In November 1944, after Greece was liberated from Germany, old drachmae were exchanged for new ones at the rate of 50,000,000,000 to 1. Only paper money was issued. The government issued notes of 1, 5, 10 and 20 drachmae, with the Bank of Greece issuing 50-, 100-, 500-, 1000-, 5000-, and 10,000-drachma notes. This drachma also suffered from high inflation. The government later issued 100-, 500-, and 1000-drachma notes, and the Bank of Greece issued 20,000-and 50,000-drachma notes.
In 1953, in an effort to halt inflation, Greece joined the Bretton Woods system. In 1954, the drachma was revalued at a rate of 1000 to 1. The new currency was pegged at 30 drachmae = 1 United States dollar. In 1973, the Bretton Woods System was abolished; over the next 25 years the official exchange rate gradually declined, reaching 400 drachmae to 1 U. S. dollar. On 1 January 2002, the Greek drachma was officially replaced as the circulating currency by the euro, and it has not been legal tender since 1 March 2002.