Soviet ruble

Soviet ruble
советский рубль (Russian)
Obverse of 1 ruble (1961) Reverse of 1 ruble (1961)
ISO 4217 code SUR
User(s)  Soviet Union
Subunit
1/100 kopek (копейка)
Symbol руб
kopek (копейка) к
Plural rublya (nom. pl.), rubley (gen. pl.)
kopek (копейка) kopeyki (nom. pl.), kopeyek (gen. pl.)
Coins 1, 2, 3, 5, 10, 15, 20, 50 kopeks, 1, 3, 5, 10 rubles
Banknotes 1, 3, 5, 10, 25, 50, 100, 200, 500, 1000 rubles
Central bank State Bank of the Soviet Union
Printer Goznak
Mint Leningrad 1921-1991 (temporarily moved to Krasnokamsk 1941-1946), Moscow 1982-1991
This infobox shows the latest status before this currency was rendered obsolete.

The Soviet ruble or rouble (Russian: рубль; see below for other languages of the USSR) was the currency of the Soviet Union. One ruble is divided into 100 kopeks, (also transliterated as kopecks or copecks Russian: копе́йка, pl. копе́йки - kopeyka, kopeyki).

In addition to standard banknotes, the Soviet ruble was available in the form of foreign rubles (Russian: инвалютный рубль); also, several forms of virtual rubles were used for inter-enterprise accounting and international settlement in the Comecon zone.[1] Many of the ruble designs were created by Ivan Dubasov.

Contents

Etymology

Main article: Ruble

The word "ruble" is derived from the Slavic verb рубить, rubit', i.e., to chop. Historically, "ruble" was a piece of a certain weight chopped off a silver ingot (grivna), hence the name.

Ruble in the Soviet Union

The Soviet currency had its own name in all Soviet languages, sometimes quite different from its Russian designation. All banknotes had the currency name and their nominal printed in the languages of every Soviet Republic. This naming is preserved in modern Russia; for example: Tatar for ruble and kopek are sum and tien. The current names of several currencies of Central Asia are simply the local names of the ruble.

The name of the currency in the official languages of the 15 republics, in the order they appeared in the banknotes:

Language In local language Transliteration
ruble kopek ruble kopek
Russian рубль копейка rubl’ kopeika
Ukrainian карбованець копійка karbovanets’ kopiyka
Belarusian рубель капейка rub’el’ kapeika
Uzbek сўм тийин so‘m tiyin
Kazakh сом тиын som tiyn
Georgian მანეთი კაპიკი maneti kapiki
Azerbaijani манат гəпик manat qəpik
Lithuanian rublis kapeika  —  —
Moldavian рублэ копейкэ rublă copeică
Latvian rublis kapeika  —  —
Kyrgyz сом тыйн som tyin
Tajik сўм тин sum tin
Armenian ռուբլի կոպեկ roubli kopek
Turkmen манат көпүк manat köpük
Estonian rubla kopikas  —  —

Note that the script for Uzbek, Azerbaijani, Moldavian, and Turkmen have switched from Cyrillic to Latin some time around the breakup of the Soviet Union.

Historical Soviet rubles

First Soviet ruble

The first ruble issued for the Socialist government was a preliminary issue still based on the previous issue of the ruble prior to the Russian Revolution of 1917. They are all in banknote form and started their issue in 1919. At this time other issues were made by the white Russian government and other governing bodies. Denominations are as follows: 1, 2, 3, 5, 10, 15, 25, 50, 60, 100, 250, 500, 1,000, 5,000, 10,000, 25,000, 50,000, 100,000. Short term treasury certificate were also issued to supplement banknote issue in 1 million, 5 million, 10 million rubles. These issue was printed in various fashions, as inflation crept up the security features were few and some were printed on one side, as was the case for the German inflationary notes.

Second Soviet ruble, January 1, 1922 - December 31, 1922

In 1922, the first of several redenominations took place, at a rate of 1 "new" ruble for 10,000 "old" rubles. The chervonets (червонец) was also introduced in 1922.

Third Soviet ruble, January 1, 1923 - March 6, 1924

A second redenomination took place in 1923, at a rate of 100 to 1. Again, only paper money was issued. During the lifetime of this currency, the first money of the Soviet Union was issued.

Fourth (Gold) Soviet ruble, March 7, 1924 - 1947

A third redenomination in 1924 introduced the "gold" ruble at a value of 50,000 rubles of the previous issue. This reform also saw the ruble linked to the chervonets, at a value of 10 rubles. Coins began to be issued again in 1924, whilst paper money was issued in rubles for values below 10 rubles and in chervonets for higher denominations.

Fifth Soviet ruble, 1947 - 1961

Following World War II, the Soviet government implemented a confiscatory redenomination of the currency to reduce the amount of money in circulation. This only affected the paper money. Old rubles were revalued at one tenth of their face value.

Sixth Soviet ruble, 1961 - 1991

The 1961 redenomination was a repeat of the 1947 reform, with the same terms applying. Newly designed notes were issued with artwork by the artist Victor Tsigal depicting scenes from Soviet life and Soviet industrial achievements. The Soviet ruble of 1961 was formally equal to 0.987412 gram of gold, but the exchange for gold was never available to the general public. This ruble maintained parity with the Pound Sterling until the breakup of the Soviet Union in 1991 when the ruble became the new currency of the Russian Federation.

1961 Series
Image Value
Obverse Reverse
1 Ruble
3 Ruble
5 Ruble
10 Ruble
25 Ruble
50 Ruble
100 Ruble
1991 Series
Image Value
Obverse Reverse
1 Ruble
3 Ruble
5 Ruble
10 Ruble
50 Ruble
100 Ruble
200 Ruble
500 Ruble
1000 Ruble

Economic role

The economy of the Soviet Union was a government-controlled planned economy, where the government controlled prices and the exchange of currency. Thus, its role was unlike that of a currency in a market economy, because distribution of goods was controlled by other mechanisms than currency, such as centrally planned quotas, queuing or blat. Only a limited set of products could be freely bought, thus the ruble had a role similar to trading stamps or food stamps. The currency was not internationally exchangeable and its export was illegal. The sudden transformation from a Soviet "non-currency" into a market currency contributed to the economic hardship following the collapse of the Soviet planned economy.[2]

Historical exchange rates

Date USD[3]
1924-01-01 2.2000
1924-04-01 1.9405
1927-01-01 1.9450
1928-02-01 1.9434
1933-04-01 1.9434
1933-05-01 1.7474
1934-01-01 1.2434
1935-01-01 1.1509
1936-01-01 1.1516
1937-01-01 5.0400
1937-07-19 5.3000
1950-02-01 5.3000
1950-03-01 4.0000
1960-12-01 4.0000
1961-01-01 0.9000
1971-12-01 0.9000
1972-01-01 0.8290
1973-01-01 0.8260
1974-01-01 0.7536
1975-01-01 0.7300
1976-01-01 0.7580
1977-01-01 0.7420
1978-01-01 0.7060
1979-01-01 0.6590
1980-01-03 0.6395
1981-01-01 0.6750
1982-01-01 0.7080
1983-01-13 0.7070
1984-01-01 0.7910
1985-02-28 0.9200 (local max)
1986-01-01 0.7585
1987-01-01 0.6700
1988-01-06 0.5804
1989-01-04 0.6059
1990-01-03 0.6072
1991-01-02 0.5605
1991-02-13 0.5450 (local min)
1992-01-01 0.5549

Replacement currencies in the former Soviet republics

Shortly after the fall of the Soviet Union in 1991, local currencies were introduced in the newly independent states. Most of the new economies were weak and hence most of the currencies have undergone significant reforms since launch that included change of names and denominations.

In the very beginning of the post-Soviet economic transition, quite a lot of people and institutions (including the International Monetary Fund) believed in the possibility to maintain the common currency working for all or at least for some of the former Soviet Union’s countries.

Political considerations were one reason for this advocacy. Certain politicians were hoping to rebuild the former Russian empire in some way, or at the very least, maintain "special relations" among former Soviet republics, or the "near abroad" as they came to be known in Russia. Another reason were the economical considerations for maintaining the ruble zone. The wish to preserve the strong trade relations between former Soviet republics was considered the most important goal.

The break-up of the Soviet Union was not accompanied by any formal changes in monetary arrangements. The Central Bank of Russia was authorized to take over the State Bank of the USSR (Gosbank) on 1 January 1992. It continued to ship USSR ruble notes and coins to the central banks of the fourteen newly independent countries, which had formerly been the main branches of Gosbank in the republics. The political situation, however, was not favorable for maintaining a common currency. A strong political consensus in respect to monetary and fiscal targets, the common institution in charge of implementing these targets, and some minimum of common legislation (concerning the banking and foreign exchange regulations) are absolutely necessary conditions to have a common currency. Amidst the economical chaos, mistrust and adjustment to democracy and market economy these conditions were far from reality.

During the first half of 1992, a monetary union with 15 independent states all using the ruble existed. Since it was clear that the situation would not last, each of them was using its position as "free-riders" to issue huge amounts of money in the form of credit (since Russia held the monopoly on printing banknotes and coins). Ukraine was very active in this. As a result, some countries were issuing coupons in order to "protect" their markets from buyers from other states. The Russian central bank responded in July 1992 by setting up restrictions to the flow of credit between Russia and other states. The final collapse of the ruble zone began with the exchange of banknotes by the Central bank of Russia on Russian territory at the end of July 1993. As a result, other countries still in the ruble zone (Kazakhstan, Uzbekistan, Turkmenistan, Moldova, Armenia and Georgia) were "pushed out". By November 1993 all newly independent states had introduced their own currencies, with the exception of war-torn Tajikistan (May 1995) and unrecognized Transnistria (1994).

Details on the introduction of new currencies in the newly independent states are discussed below.

Country New
currency		 Conversion rate
from ruble		 Date introduction new currency Date leaving ruble zone Remarks
 Armenia Dram 200 22 November 1993  ? -
 Azerbaijan Manat 10 15 August 1992 1 January 1994 The Manat was revalued 5,000 to 1 on 1 January 2006.
 Belarus Ruble 10 May, 1992 26 July 1993 The Belarusian ruble was redenominated 1,000 to 1 on 1 January 2000.
 Estonia Kroon 10 20 June 1992 22 June 1992 Pegged to German Mark (1 DEM = 8EEK).
The first ‘hardened’ currency in former SU. Estonia introduced Euro in 2011.
 Georgia Kupon lari 1 5 April 1993 20 August 1993 The "first Lari" was a temporary currency. It was replaced 2 October 1995 at a rate of 1,000,000 to 1 by the Lari.
 Kazakhstan Tenge 500 15 November 1993  ? -
 Kyrgyzstan Som 200 10 May 1993 15 May 1993 Until 1 January 2008 only banknotes were issued.
 Latvia Rublis 1 7 May 1992 20 July 1992 The Latvian ruble was a temporary currency, replaced by Lats at a rate of 200 to 1 in March 1993. Latvia plans to introduce the Euro in 2014.[4]
 Lithuania Talonas 1 1 May 1992 1 October 1992 The Talonas was a temporary currency, replaced by the Litas at a rate of 100 (Talonas) to 1 on 25 June 1993. Lithuania plans to introduce the Euro in 2014.[5]
 Moldova (excl. Transnistria) Cupon 1 1992  ? The Cupon was a temporary currency replaced by the Leu at a rate of 1,000 to 1 on 29 November 1993.
 Russia Russian ruble 1 1992 July 1993 The Russian ruble was redenominated 1,000 to 1 on 1 January 1998
 Transnistria Ruble 1 1994  ? The Transnistrian Ruble was redenominated 1,000,000 to 1 in 2000.
 Tajikistan Ruble 100 10 May 1995  ? As a result of its civil war, Tajikistan was the last country to leave the ruble zone. The Tajikistani ruble was replaced by the Somoni at a rate of 1,000 to 1 on 30 October 2000.
 Turkmenistan Manat 500 1 November 1993  ? It was redenominated in 2009 at a rate of 5,000 to 1.
 Ukraine Karbovanets 10 1991 10 January 1992 The Karbovanets was replaced by the Hryvnia at a rate of 100,000 to 2 on 16 September 1996.
 Uzbekistan Som 1 15 November 1993 15 November 1993 The first Som was a transitional currency, redenominated 1,000 (old) to 1 (new) on 1 July 1994.

Kyrgyzstan

Kyrgyzstan decided to leave the ruble zone, because it considered the Russian monetary policy to be too inflationary; which was not good for stabilizing the economy. Kyrgyzstan introduced its own currency (the som) on 10 May 1993. The first issue consisted of banknotes of 0.01; 0.10; 0.50; 1; 5 and 20 Som. After a period of dual circulation the som became the only legal tender, on 15 May. New series of banknotes were introduced in 1994 and 1997. Starting in January 2008, low denomination banknotes were phased out and replaced by coins.

Latvia

Latvia was the first country to introduce its own currency: the Latvian ruble, introduced May 7, 1992, on par with the Soviet ruble and circulated parallel with it; on July 20, it became the sole legal tender.[6] It was the second country to leave the ruble zone entirely. Latvia decided to leave the ruble zone, because it considered the Russian monetary policy to be too inflationary; which was not good for stabilizing the economy. Latvia declared independence on 4 May 1990, this was, however, not formally recognized by the Soviet Union until 25 December 1991. On 3 September 1991 the Supreme Council of the Republic of Latvia passed a resolution to restore the status of the Bank of Latvia to that of a central bank, with the exclusive right to issue the national currency.

In the first four months of 1992 Latvia was adversely affected by the inflation of the ruble. In addition, the outgoing cash payments (with other ex-USSR states) surpassed the incoming money amounts by 122 million rubles (5.9%) in February and in April by 686 million rubles (29.2%), thus causing a very serious shortage of cash. Since money was issued by Russia, the Bank of Latvia was unable to improve the cash circulation in the country. The situation completely depended on the possibility of receiving or buying cash and credit resources from the Russian central bank. It was evident that a crisis could develop, in which the Bank of Latvia would not be able to execute even the most necessary payments.

Thus the Monetary Reform Committee of the Republic of Latvia was established, and on 4 May 1992 it passed the resolution on introducing a new temporary currency: the Latvian ruble. Notes were issued on 7 May in the following denominations: 1, 2, 5, 10, 20, 50, 200 and 500 rubles. They were exchanged at par with Soviet rubles. Until 20 July both currencies circulated together, at that day the Soviet ruble ceased to be legal tender and Latvia left the ruble zone entirely.

The Latvian ruble was however intended as a temporary currency. It was gradually replaced by the new national currency (the lats). This process started on 5 March 1993 with the introduction of the 5 lats-banknote and would be completed on 20 July 1998, with the 500 lats-banknote.

The successful reform ending in the introduction of the lats facilitated Latvia’s transition to a stable market economy.

Uzbekistan

Uzbekistan was "pushed out" of the Ruble zone as a consequence of the July 1993 introduction of new banknotes in Russia.

Uzbekistan introduced a temporary national currency (the som) on 15 November 1993. It replaced the ruble at a rate of 1:1. Between July and November 1993 old and new ruble notes circulated together. On 1 July 1994 the temporary som was replaced by a new, permanent, version of the som. Old notes were exchanged at a rate of 1.000 to 1. At its introduction 7 som were equal to 1 United States dollar.

References

  1. ^ (Estonian) eestimajandus.ee: "NSV Liidu valuutasüsteem ja esimesed ühisettevõtted"
  2. ^ see Ilmari Susiluoto
  3. ^ Archive of Bank of Russia http://cbr.ru/currency_base/OldDataFiles/USD.xls
  4. ^ Lessions from Latvia
  5. ^ Europe's Planned Budget Cuts Must Be Enacted `Fast,' Baltics Leaders Urge
  6. ^ Encyclopædia Britannica, Britannica book of the year: 1993, p649

External links

in circulation
obsolete