The monetary reform of 1998 in

Russia Russia (, , ), or the Russian Federation, is a transcontinental country spanning Eastern Europe and Northern Asia. It is the largest country in the world, with its internationally recognised territory covering , and encompassing one-ei ...

was launched 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 (CBR; ), doing business as the Bank of Russia (russian: Банк России}), is the central bank of the Russian Federation. The bank was established on July 13, 1990. The predecessor of the bank can ...

, 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 ( rus, Борис Николаевич Ельцин, p=bɐˈrʲis nʲɪkɐˈla(j)ɪvʲɪtɕ ˈjelʲtsɨn, a=Ru-Boris Nikolayevich Yeltsin.ogg; 1 February 1931 – 23 April 2007) was a Soviet and Russian politician wh ...

issued a

presidential decree A decree is a legal proclamation, usually issued by a head of state (such as the president of a republic or a monarch), according to certain procedures (usually established in a constitution). It has the force of law. The particular term used for ...

, "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—also called a bill (North American English), paper money, or simply a note—is a type of negotiable instrument, negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand. Banknotes w ...

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 coins were also introduced, with the image of St. George (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 measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "languag ...

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 economics