The monetary reform of 1993 in Russia: causes and results


Whatever reforms are carried out in Russia, for some reason they always end up with the fact that the state once again gets into the pocket of its citizens. After all, it is much easier than to earn or give to earn. That and the monetary reform of 1993 in Russia, hiding behind the slogans of curbing inflation, once again confiscated small savings from the population.

Post-war reform


For those who survived the Patriotic War and tried to integrate into a rapidly changing reality, this was already the fifth monetary reform in less than half a century. Most judged by the older generation about the post-war reform of 1947 as a withdrawal of large amounts of money on old outstanding bonds. The main purpose of the exchange of money was to prepare for the abolition of the card system. New banknotes were issued, which were exchanged for old ones at a ratio of 1:10, deposits up to 3 thousand rubles were exchanged 1: 1, from 3 to 10 thousand in a ratio of 3: 2, over 10 thousand - 2: 1. In general, the goals of the reform were achieved, the USSR was the first of the warring countries to abolish the rationing system, the economy developed with a slight inflation, the incomes of the population began to grow.


They practiced twice more on the population of Russia - in 1961 and 1991. In 1961, the ruble was denominated, the "bad" money was exchanged for new at a ratio of 10: 1. Prices and wages were reduced in proportion, however, the sediment still remained - a lot of money was changed for a little. The people were told that the ruble contained 0.987412 grams of gold, although the government was not going to exchange anything to anyone. The goal of monetary reform was to establish proportions at a lower level between incomes and prices.

In 1991, the government attended the seizure of illegal income and issued new banknotes of 50 and 100 rubles. To exchange amounts of money more than 100 rubles it was necessary to provide information about their origin. The majority of the population would not have noticed this reform, the savings were low, but the forms for holding money exchanges were simply gangster - they announced the exchange at 21:00 pm and gave it three days. The goals of the reform - to make people's savings work for the economy - could not be achieved, the sad result is known to all.

Country on the brink of survival

After the collapse of the Soviet Union, Russia, as its successor, received a large burden of economic and political problems associated with the creation of a new state. The government began economic reform with “shock therapy, ” price liberalization, high taxes, and social spending cuts. These measures planned to stabilize the financial situation, reduce the state budget deficit and create conditions for attracting foreign investment.


As a result, 1000-1200% were inflated, prices increased 26 times (with the government’s plan 5-10 times), wages increased only 12 times, putting the majority of the population on the brink of survival. The state’s monopoly on foreign trade was abolished, which allowed, on the one hand, to fill empty store shelves with imported goods, and on the other, almost all industries that were not used to competition collapsed. The issue of money has fallen, prices have risen, and the economy simply lacked money. By June 1992, the amount of mutual defaults was 2 trillion rubles. Money in 1992 depreciated faster than their emission occurred. The government was forced to re-launch the printing press. By some estimates, from July 1992 to January 1993, 4 times more money was printed than before in economics.



The implementation of reforms was greatly complicated by the opposition of the President and the Supreme Council, the congress of people's deputies. The government carried out a liberal reform, ceased subsidizing enterprises, which caused a collapse in the economy and impoverishment of the population. This led to an increase in the opposition forces, and under their pressure they began again to issue loans to industrial enterprises and to issue money supply. The confrontation between the two branches of power was resolved by holding a referendum on a vote of confidence in the President, which he unexpectedly won for many. In March 1993, mutual debts had already grown to 4 trillion rubles, with the budget getting worse. The government again returned to the policy of containing emissions. And they began to think more and more about reform and the introduction of Russian banknotes.

Need for reform


To use the money of the state, which is not, of course, strange. Although only the Central Bank of Russia was able to issue rubles of the 1961-1991 type, state banks of the former Soviet republics could issue ruble loans than they actively used. As a result, the unsecured money supply gave a huge burden on the Russian economy. By 1993, many republics had already issued their national currencies, and the Russian government feared an uncontrolled influx of Soviet-style bank notes.

The end of the ruble zone

The abolition of the use of Soviet-style banknotes, the division of the monetary systems of Russia and other republics, which also continued to use the ruble in the domestic monetary circulation, put an end to the ruble zone. In fact, Russia unilaterally left the ruble zone, and the ruble ceased to exist as a single means of payment in the post-Soviet space. The Russian government has lost the opportunity to influence the cash ruble issue and the economy of the ruble zone countries.


The non-cash ruble also ceased to exist as a means of payment among the CIS countries. This separation of monetary systems led to a complication of relations with the republics, since their currencies were pegged to the ruble. The Central Bank of Russia was forced to transfer part of the new banknotes to Kazakhstan and Belarus. When Russia offered to create a new type of ruble zone, only Belarus agreed to someday negotiate about it.


The purpose of the monetary reform of 1993 in Russia was to curb inflation and replace the money of the 1961-1992 model with new banknotes, divide the monetary systems of Russia and other countries of the former Soviet Union, stop the flow of money not provided with goods from other republics. In addition to Soviet money, circulation and money issued by the Bank of Russia was canceled. Under hyperinflationary conditions, the means of payment were issued in large denominations and with a new design. For example, there were no Soviet symbols on the 10 thousand rubles bill, but a Russian flag appeared on the Kremlin tower, the inscriptions remained only in Russian, and on the reverse of coins there was an image of the coat of arms of Russia, which passed 50 rubles 1993 unchanged. The exchange of funds, as usual, was confiscatory, since a number of restrictions were introduced.


The Russian government used the Soviet experience in creating difficulties for the population, the reform began during the holiday season, money had to be exchanged within two weeks - from July 26 to August 7. The initial limit for Russian citizens was set at 35, 000 rubles (approximately $ 35), and the passport stamped on the exchange made. The country began to panic, people could not get into the offices of Sberbank, which was responsible for the exchange. Later, the amount of exchange increased to 100 thousand rubles, and the term was first extended until the end of August, and then until the end of the year, however, from October 1, only upon presentation of documents confirming the impossibility to make the exchange in earlier periods. Amounts over the fixed limit were deposited.


Banknotes of 10 thousand rubles of the 1992 sample were exchanged without restrictions. And the coins were in use until the 1998 reform. The design of the bills of 1992 and 1993 differed slightly, mostly in color, and the 50 ruble coin of 1993 remained the same as 1992, only from bimetallic it became copper. Anyway, a lot of people lost their savings. Companies could exchange cash within the cash balances on the day the exchange started, the amount should not exceed certain limits and the amount of trading revenue on July 25. It was also announced the abolition of the mythical gold content of the ruble.



The main result of the monetary reform in 1993 of Russia is the introduction of its own monetary unit and the construction of the monetary system. 24 billion banknotes were seized. The new ruble finally divided the monetary systems of the post-Soviet countries and indirectly contributed to the strengthening of their national currencies. The separation of currencies allowed Russia to more effectively control the money supply. The result of the reform is the creation of its own monetary system. She could not improve monetary circulation or strengthen the national currency. Hyperinflation continued to grow, in 1995 it was 834%, the budget deficit increased. The monetary reform of 1993 in Russia created the population’s total mistrust of its own currency, the “dollarization” of the economy, which a year later led to a precipitous fall of the ruble, known as “black Tuesday”.

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