Economist: Denomination in Russia, de facto, happened

the denomination of the ruble, which recently again began to discuss “de facto happened because I stopped going to the penny”, and today “the youngest coin was the ruble.” The opinion in the edition of “Interlocutor” was expressed by the economist Pavel Medvedev.

however, he argues that talking about denomination in the banking community and among economists go a long time. “In 2011, when I was still a member of the National banking Council (a collegial management body of the Bank of Russia, which includes 12 people — ed.), such conversations were held. Because the money was already terribly uncomfortable. However, in recent years, this disadvantage is not so pronounced: the number of people, calculated by Bank cards”, — says the expert.

however, he said, “the denomination 100:1 we have already de facto happened because I stopped going to the penny, as you know, the ruble is 100 kopecks”. “Today the youngest coin was the ruble. And he had nothing on him, nothing to buy”, — stressed Medvedev.

In General, however, he was critical of the idea of a denomination. “It will certainly irritate people. And for the elderly — those who remember the denominations of the previous years — will look like just a nightmare,” he said, because “in the current environment, as before, will cause a rise in prices”.

moreover, in his view, “psychologically denomination in an unstable economy (which does not show effectiveness) is always dangerous.”

Recall that the initiative to denominate ruble in 1998, in early July was made by the head of information-analytical center “Alpari” Alexander Razuvaev. However, if in 1998, the course of the denomination was 1,000:1, but now, according to experts, it would be optimal to divide the ruble at 100. The main reason towhich, according to the analyst, it is necessary to conduct a denomination — sharply increased the amount of cash in Russia.

According to Razuvaev, “the business brings cash”, which indicates the growth of cash, the shadow economy and so on. “I think the penny should be returned, a bottle of water — 50 cents, for a long time it suggests”, he said, noting that the exchange rate will be 60-70 cents per dollar.

in addition, he noted, is considered to be successful denomination during a period of low inflation, and inflation in Russia in annual terms by 3%.

According to the Bank of Russia, since the beginning of July the volume of cash in Russia has already exceeded the record high of 11.6 trillion.

Reacting to these ideas, July 13, the Central Bank Chairman Elvira Nabiullina said in the Federation Council that he sees no reason to pursue the Russian national currency denomination, and the controller won’t even consider such an option. “No denominations, no monetary reform we never considered. We have the order of all and denominations, and banknotes. No reason here to change there,” — said the head of the Central Bank.

In her words, “no limits, no changes” the regulator is not considering and has no plans.

for his part, the speaker of the Federation Council Valentina Matvienko spoke on this subject more rigidly, calling the conversations about the possible denomination of the ruble “absolute provocation”.

we also Add that the Russian national currency since the beginning of this year has significantly depreciated against the dollar and the Euro. Strong pressure on the rouble had a General panic in the financial markets due to the rapid spread of the pandemic coronavirus infection COVID-19 and concerns about its impact on the global economy, and a collapse in oil prices.

So, the strong devaluation of the Russian currency occurred on March 7 on the international Forex market, after the day before the deal collapsed OPEC+, — countries of the Alliance are unable to agree on cutting oil production, nor of the extension of the deal for a longer period (1 April 2020). Then, on March 9, 2020, the financial and oil markets suffered “black Monday”, and on 18 March, the market embraced a “black Wednesday” with yet another collapse of oil prices, the Russian national currency in the course of trading on the Moscow stock exchange has updated (at the time) a record low against the dollar and Euro since February of 2016, 81 and 88 million, respectively.

we Add that the real effective exchange rate of the ruble (inflation-adjusted) in June 2020 rose 2.9% against foreign currencies relative to the previous month. In this case the real rate of the ruble against the dollar rose during this period by 5.2%, to Euro — by 1.7%. However, for the first 6 months of the current year the real effective ruble exchange rate decreased by 5%.

Stories about how you tried to get help from the Russian state in terms of coronaries and what came of it, email it to