Russia Russia, or the Russian Federation, is a country spanning Eastern Europe and North Asia. It is the list of countries and dependencies by area, largest country in the world, and extends across Time in Russia, eleven time zones, sharing Borders ...

launched a monetary reform on January 1, 1998. Preparation started in August 1997. Replacement of the old banknotes occurred gradually, until 2002.

Background

Rumours of reform occurred regularly and were repeatedly denied. 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 The Central Bank of the Russian Federation (), commonly known as the Bank of Russia (), also called the Central Bank of Russia (CBR), is the central bank of the Russia, Russian Federation. The bank was established on 13 July 1990. It traces its ...

, Sergei Dubinin, said that monetary reform was premature.

Reform

250px, 50,000 roubles, pre-reform banknote (issued in 1995) 250px, 50 roubles Redenominated banknote (issued in 1997) On August 4, 1997, President

Boris Yeltsin Boris Nikolayevich Yeltsin (1 February 1931 – 23 April 2007) was a Soviet and Russian politician and statesman who served as President of Russia from 1991 to 1999. He was a member of the Communist Party of the Soviet Union (CPSU) from 1961 to ...

issued a

presidential decree A decree is a legal proclamation, usually issued by a head of state, judge, royal figure, or other relevant authorities, according to certain procedures. These procedures are usually defined by the constitution, Legislative laws, or customary l ...

, "On change the face value of a currency and the scale of prices". Exchange began on January 1, 1998, with a new rouble being worth 1000 old roubles (1993 and 1995 series). Since the Soviet monetary reform in 1991 had left a negative memory by the three-day exchange of 50 and 100-rouble notes, the new exchange was held progressively, until 2002. All redenominated coins of the Central Bank of Russia (1, 5, 10, 20, 50, 100 roubles and collectible), unlike in the previous two denominations, ceased to be legal tender. The appearance of the new

banknote A banknote or bank notealso called a bill (North American English) or simply a noteis a type of paper money that is made and distributed ("issued") by a bank of issue, payable to the bearer on demand. Banknotes were originally issued by commerc ...

s after the denomination did not change; only the face value changed with three zeros removed. Coins disappeared from circulation as well as the old 1000-rouble banknote, equivalent to the new 1-rouble coin.

Kopeck The kopeck or kopek is or was a coin or a currency unit of a number of countries in Eastern Europe closely associated with the economy of Russia. It is usually the smallest denomination within a currency system; 100 kopeks are worth 1 ruble o ...

coins were also introduced, with the image of

St. George Saint George (;Geʽez: ጊዮርጊስ, , ka, გიორგი, , , died 23 April 303), also George of Lydda, was an early Christian martyr who is venerated as a saint in Christianity. According to holy tradition, he was a soldier in the ...

(1, 5, 10, 50 kopecks), as well as ruble coins, with the image of an eagle (1, 2, 5 roubles).

Results

The monetary reform had a positive impact on the money circulation: it reduced the nominal amount of money catering to payment transactions, it simplified the calculation of the population for goods and services, and

accounting Accounting, also known as accountancy, is the process of recording and processing information about economic entity, economic entities, such as businesses and corporations. Accounting measures the results of an organization's economic activit ...

operations could be performed with and without cash. There was a return to the familiar monetary system. {{Boris Yeltsin Finance in Russia Monetary reform Reform in Russia Economic history of Russia 1998 in Russia 1998 in economic history