Monetary reform of 1991 (known also as Pavlov Reform) was the last such reform in the

Soviet Union The Union of Soviet Socialist Republics. (USSR), commonly known as the Soviet Union, was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 until Dissolution of the Soviet ...

. The reform retired and confiscated large-denomination bills to attempt to dampen inflation and combat the

black market A black market is a Secrecy, clandestine Market (economics), market or series of transactions that has some aspect of illegality, or is not compliant with an institutional set of rules. If the rule defines the set of goods and services who ...

within the Soviet Union. It began on January 22, 1991. Its architect was Minister of Finance Valentin Pavlov, who was to become the last prime minister of the Soviet Union on January 14, 1991.

Overview

On 22 January 1991,

President of the USSR The president of the Soviet Union (), officially the president of the Union of Soviet Socialist Republics (), abbreviated as president of the USSR (), was the executive head of state of the Union of Soviet Socialist Republics from 15 March 1 ...

Mikhail Gorbachev Mikhail Sergeyevich Gorbachev (2 March 1931 – 30 August 2022) was a Soviet and Russian politician who served as the last leader of the Soviet Union from 1985 to dissolution of the Soviet Union, the country's dissolution in 1991. He served a ...

signed a

decree A decree is a law, legal proclamation, usually issued by a head of state, judge, monarch, royal figure, or other relevant Authority, authorities, according to certain procedures. These procedures are usually defined by the constitution, Legislativ ...

where the 1961-issued large-denomination banknotes, the 50 ruble and 100 ruble banknote, to be retired and removed from circulation. All banknotes were to be exchanged for smaller denomination bills, with an unrestricted 1000 ruble exchange limit, roughly equivalent to the monthly salary. The exchange deadline was 3 days from January 23 to January 25.

Results

After the decree was reported on television, on 23 January 1991, a crowd gathered and started besieging banks to exchange their bills to smaller variants. As banks were not informed of the decree, and with limited money, they refused to open, while lines were starting to form. Soviet Police was summoned to maintain order. Ruslan Khasbulatov said that: "The utter immorality of this decree is bound to cost the central government what little confidence people still have in it." The governmental plan of confiscating 30 billion rubles failed as only 14 billion roubles were withdrawn from circulation. More economical reforms under Pavlov's leadership continued, described by Sandeip Khakase as " shock therapy" reforms and deemed unpopular. On April 2, prices for products were increased by 3 times, while wages were only increased by 20-30%, causing many workers to lose jobs.

Overview

Results

References

External links

See also