The question of what denomination can be answered in this way: this is a decrease in the nominal expression of banknotes issued by the state. It so happened that the exchange of money - the process is not so rare and mostly unpleasant. Only after World War II, more than six hundred denominations were held all over the world. If the country's economy is in good condition, then this concept is purely technical in nature. Money denomination becomes more entertaining if accompanied by hyperinflation.
Types of Denomination
Note that in some cases this concept is called the replacement of one banknote with another, while their nominal value remains unchanged. There are full and partial denominations. In the first case, all existing denominations are replaced, in the second - banknotes of one or more denominations. In terms of speed, the denomination process can be fast, slow, long, and unlimited. The first type was extremely popular in Soviet times, and the latter is typical of the United States. According to the influence on the country's citizens, reforms can be “hard” or “soft”.
What is Soviet denomination
In 1913, the Russian ruble was a good and respected currency based on the gold standard, but over time he had to go through a lot. In August 1914, the free exchange of paper money for gold was stopped. The state bank was allowed to issue paper money in unlimited quantities, but within reason. As a result, the sum in the amount of two and a half billion rubles was in circulation, and by March 1917 it had increased to 9.9 billion. Trying to stabilize the situation, the interim government increased the speed of the printing press, and the money supply doubled.
The Bolsheviks during this period were obsessed with the idea of the complete abolition of money, but at the same time they printed new, unsecured banknotes even faster than the interim government. But this was not enough. For this reason, short-term obligations of the State Treasury were issued. There was little hope that through the measures taken it would be possible to stabilize the economy, but the aspirations were not destined to come true: a civil war began. The situation improved slightly only with the proclamation of the NEP, a monetary reform was carried out, the ideologist of which was Sokolnikov G.Ya. As part of the reform, three denominations were carried out - in 1922, 1923 and 1924. The ruble in the end became cheaper by 50 thousand times! At the same time, it was decided to issue bank tickets secured with gold - gold coins. Despite this, the old money was in circulation until 1947.
Stalin's monetary reform
What is the Sokolnikov denomination, few already remember, but the reform carried out on December 14, 1947 is probably still alive in the memory of the older generation. The people were given only one week to exchange old money for new bills. At the same time, the course was monstrous - 10: 1. True, bank deposits were exchanged at a more favorable rate, but few citizens had them. Along with the monetary reform, basic food cards were canceled. All goods could be bought freely, but at noticeably higher prices. The people were insolently robbed, but at the same time the money circulation became stable.
1961 denomination
The reform carried out in 1961 was not particularly necessary from an economic point of view. It was just one of the periods of the “voluntarism” era. The minting of new coins began in 1958, and new paper units began to print at the end of 1959. But what is the denomination of the USSR, the country's citizens learned only on January 1, 1961, when the exchange rate was again predatory - all the same 10: 1. People, remembering the previous reform, rushed to the banks in the hope of making a more profitable exchange, but this time there was no preferential rate. They managed to exchange money for everyone, and the number of exchange points was not limited. True, the law enforcement agencies took note of those who exchanged them too much, but, in general, the reform passed without noise.
Monetary reforms in other countries
The meaning of the word denomination is known in all countries. Money exchange was used as an instrument of the class struggle on the path of socialism. In the post-war period, reform was carried out in Poland and the Czech Republic. At the same time, each person could exchange no more than 500 monetary units. In those same years in Romania, for one new leu, it was necessary to give 20 thousand old nominal signs. The denomination of the
Belarusian ruble also took place. Since the time of independence, two monetary reforms have already been carried out in this country - in 1994 and 2000. In 2011, the question was raised about the relevance of the third denomination due to the rapid increase in consumer prices, but experts rejected such a need. Moreover, denomination is a complex and expensive project, and the economic situation in Belarus does not contribute to this in any way.
Russian reform of 1997
What is a denomination, the Russians learned in August 1997, when the state decided to cross out three zeros on banknotes. As a result, Russian citizens instantly turned from millionaires into ordinary poor people. Representatives of the Central Bank in the year of denomination convinced the people that there was no cause for concern, and reform is just a technical act to facilitate calculations in the economy, it has neither quantitative nor time limits. Officials claimed that a change in the value of banknotes would be a victory over inflation, but in reality it was too early to talk about stabilizing the economy. And this became clear in August 1998 after the financial crisis. During this period, the ruble fell sharply, and inflation reached tens of percent per year.
After the reform, the first Russian president made a promise that there would be no more zeros on Russian banknotes. But in 2006, this promise was partially broken with the appearance of a five-thousand-ruble denomination in circulation. Whether the ruble will be denominated in Russia in 2014 cannot be reliably said. Professional analysts are skeptical of rumors of a possible monetary reform in the country. They say that Russia is not interested in the denomination, because the event is expensive, and the money in the budget after the costs of the Olympics is not enough to hold it.
Why rumors about a possible denomination arise
According to some sources, the rumor about the 2014 monetary reform is spreading by Russian bankers. This can be explained by the fact that as a result of removing excess zeros on banknotes, the influx of bank deposits will increase, since such institutions exchange at the most favorable rate for Russian citizens. But there is another opinion in this regard. Rumors could spread realtors, worried about the temporary decline in housing prices. Experts say that many citizens still remember the previous reforms of the Soviet era, accompanied by defaults, and they will rush to get rid of cash by investing in real estate. This is a kind of strategic move in an effort to “revive” the real estate market in Russia. But all this is just reasoning, which should be treated, if not skeptically, then at least critically. Finally, we note that in the next two years, the denomination is definitely not expected, to a greater extent due to the lack of funds for its implementation. So we can sleep peacefully!