Monetary reform in Russia, 1998

The Monetary reform of 1998 in Russia was launched on January 1, 1998. The preparation for it were carried out from August 1997. The replacement of the old banknotes occurred gradually until 2002.

Background

Rumors of reform occurred regularly and was repeatedly refuted. In June 1996, the head of the Working Center for Economic Reform Minister Sergei Pavlenko announced the imminent denomination. According to his calculations, it could not be implemented before 1998, "when inflation in the country will be permanently suppressed". However, in September 1996, the chairman of the Central Bank of Russia Sergei Dubinin said that it was premature for monetary reform in Russia.

Reform

50,000 roubles, pre-reform banknote (issued in 1995)

50 roubles Redenominated banknote (issued in 1997)

On August 4, 1997 President of Russia Boris Yeltsin issued a presidential decree "On change the face value of a currency and the scale of prices". Exchange began on January 1, 1998 by a factor of 1:1000, that is consistent with one new ruble 1000 old (of 1993 and 1995). Given the negative experiences on a three-day exchange of 50 and 100-ruble notes in the Soviet Union in 1991, the exchange denominated cash held progressively until 2002.

All redenominated coins of the Central Bank of Russia (1, 5, 10, 20, 50, 100 rubles and collectible), contrary to the tradition of the previous two denominations ceased to be legal tender. The appearance of new banknotes after the denomination has not changed, only the face value of the zeros were removed. Coins disappeared from circulation, and with them the old banknote of 1000 rubles (i.e. paper at par value of 1 ruble 1998).

There have also been introduced kopeik coin with the image of St. George (1, 5, 10, 50 cents) and the ruble coin with the image of the eagle (1, 2, 5 rubles).

Results

The monetary reform had a positive impact on the money circulation: reduce the nominal amount of money catering to payment transactions, simplify the calculation of the population for goods and services, and accounting operations performed in both cash and non-cash. There was a return to the familiar monetary system.

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