Many people remember the 90s and banknotes that were in circulation. The salaries of middle-class Russians were then measured in hundreds of thousands of rubles. That's just for people who without exception turned into millionaires, there was little joy from this - they were rapidly impoverished. The denomination of 1998 allowed this process to be slightly slowed down. Let's talk about why it was carried out and what were the consequences of the reform, which was not easy for Russia.
What is a denomination
To begin with, it will be useful to understand what a denomination is in general. It's simple: economists call this term the change in the denomination of banknotes. Most often, the denomination is carried out as a result of galloping inflation, in which money depreciates at a rate of 100-200% per year. In the entire history of the existence of paper money, this situation has developed several times.
Usually banknotes withcirculation in the state are replaced by an analogue of a smaller denomination. The conversion rate can vary significantly depending on the current state of the economy.
Why was it held in 1998
The beginning and middle of the 90s in Russia, and throughout the post-Soviet space, was very difficult. With the connivance of the government, some people made billions of dollars (and we are not talking about rubles) capital in a matter of months, selling military equipment and weapons, privatizing huge factories and selling the most modern machine tools at the price of scrap metal - the country was plundered before our eyes. Others quickly fell into poverty. The most vulnerable were artists, engineers, scientists and those who were not associated with production.
Even the average worker then received hundreds of thousands of rubles a month, but a carton of milk cost from 6,000 rubles, a bus fare from 1,000 to 2,000 rubles (depending on the city), the cheapest chewing gum - 200-300 rubles, and a loaf of bread - about 3,000 rubles.
Of course, life in such conditions, especially after the stability of the USSR, where food prices had not increased for decades, seemed hellish. However, it was such for almost all the inhabitants of a huge country.
Accountants had a particularly hard time. Filling out reports with thousands of salaries, summing up millions and billions of summaries - this required exceptional care.
There was no stability, prices rose rapidly. In order not to change price tags in stores every week, sellers indicatedprices are in dollars, but this was banned relatively quickly.
Impunity and weak control have spawned a wave of counterfeiting. Millions of banknotes were in circulation: both made masterfully, on the best equipment, and rather of poor quality. According to some data, in 1997, the money supply in Russia was 40% counterfeit.
To slow down inflation, a denomination was carried out in Russia in 1998.
What has changed in the design of banknotes
The design itself hasn't really changed at all. The only difference between the new bills and the old ones was the number of zeros. So, a bill of 100,000 rubles turned into a hundredth note familiar today, and 500 thousand, having lost three zeros, became an ordinary five hundred. Instead of banknotes in denominations of one, two and five thousand rubles, coins were introduced.
Smaller denominations were simply withdrawn from use. However, no one noticed this - banknotes in denominations of 100-500 rubles by that time were completely insignificant and were perceived in much the same way as coins of 1-5 rubles today.
How did the reform go
The 1998 denomination gave rise to serious unrest and unrest, which is natural: frightened by the events of recent years, the people did not believe in anyone or anything.
Everything was done to prevent speculation and any financial fraud during the denomination. So, it was forbidden to unreasonably raise prices in stores - a special committee was specially created to monitor the order and deal withevery identified case of violations of the law.
The procedure was very simple: in any branch of the state bank, a citizen could easily exchange old-style money for banknotes and coins of the new one.
By the way, it was at this time that kopecks were revived - coins appeared in denominations of 1, 5, 10 and 50 kopecks. By 1997, such small monetary units were simply forgotten. If a loaf of bread already cost several thousand rubles, then it is hard to imagine that it could be paid for with penny coins.
How long did it take to change the money
One of the few reasonable decisions of that government was that the denomination of 1998 in Russia was carried out extremely gradually. There were no rigid time frames that left people with significant savings that they did not have time to exchange for new money.
The exchange began in 1998. From January 1, 1998, new banknotes and coins began to be accepted in stores along with the old ones. This continued until the end of the year. As a result, one could see a rather unusual picture - for the convenience of buyers and sellers, two prices were indicated on the price tags: before and after the denomination.
The only exception was non-denominated coins in denominations from 1 to 100 rubles - they were no longer accepted even in stores. However, it cannot be said that this hurt the well-being of the Russian people. Most of them no longer remembered when they were holding a coin in denominations of 1-5 rubles. Well, coins with a face value of 100 rubles were used in almost the same way astoday a penny: for example, to give change in a store. No wonder, because you could only buy a third of chewing gum for 100 rubles.
Shops stopped accepting old money from January 1, 1999, but they could be exchanged in banks until the end of 2002. Thanks to this, even the most slow-witted people and residents of provincial towns and villages got the opportunity to fully exchange their savings for new money, without shaking the already not too stable family budget.
Consequences of the reform
The denomination of the ruble in 1998 really had important consequences, mostly positive for both the state and ordinary citizens.
Let's start with the fact that financial transactions have been simplified. A huge amount of depreciated money was promptly withdrawn from circulation.
People, shocked by recent prices, gradually began to come to their senses - paying for purchases in the store with tens and hundreds of rubles was much more convenient than tens and hundreds of thousands.
Played a role and psychological effect. Before the reform, some people, considering themselves millionaires, simply thoughtlessly spent money, completely losing the opportunity to plan a family budget.
The pennies familiar to everyone since childhood have also returned. True, they quickly went out of circulation - inflation was not tamed at all, it was only possible to slow down its pace a little.
Conclusion
This concludes the article. Now you know why the 1998 denomination was carried out, howthe reform took place, what were its main goals, benefits and results.
