Why are Russians so alarmed the innocent announcement of the introduction of new denominations
Printing factory “Goznak” in Perm. Photo: Vladimir Smirnov/TASS
Mikhail Melnikov
The announcement by the Central Bank of issuing new — 200 – and 2000-ruble — bills caused an unexpected interest in the society. Nothing new in the idea: over a year ago, for example, the band “Mumiy Troll” has written to the Central Bank the design of the bill in 2000 rubles with views of Vladivostok. Actually the appearance of new tickets to the Bank of Russia has not been approved yet, not even called the city, whose landmarks will be photographed.
But, of course, is not about the design of the worried citizens. In modern unstable conditions the announcement of the new banknotes was seen as a warning about a new devaluation. Not surprisingly, the reputation of the Central Bank is such that even common it solutions it is necessary to check for the presence of double bottom. Ask the experienced gamblers, they all sometimes for fun allow myself to play a little honest at least to remember how it’s done, to feel on the other side of the table.
Eyes on the dollar?
If we are talking about the devaluation of the ruble, it is necessary to add, relative to what this devaluation can occur. One thing in relation to the dollar, other — regarding sausages. These things are interrelated, but without hard dependencies: for the last two years retail prices rose not as much as the dollar in exchange offices.
Fear of currency devaluation is not necessary — she’s already made. Of course, there may be another one or two turns to weaken the national currency. This can happen for two reasons.
First, in the event of a fall in Brent crude prices, say to $20, our Urals will cost no more than $17, and for dollar will give about 95 rubles.
Secondly, in the event of a change in monetary policy the Central Bank and the return to Russia of its reserves, now stored in the bonds the U.S. Federal reserve system. Here you can expect the devaluation to approximately 80 rubles, but choking from lack of money, the economy will get, finally, the long-awaited cheap loans.
A special case of the second option is a money issue, intended for lending to the real sector, primarily agriculture and high-tech industries.
Properly conducted devaluation of the national currency is a powerful economic tool, it can not be expected from the Central Bank of applying it in action.
The price is not the answer
What to trade and devaluation, which is sometimes for simplicity referred to as inflation (oddly enough, a direct link between inflation and rising prices actually no, the price increase in Russia is traditionally ahead of inflation), then it is really important parameter, these are the price tags we see in stores, it is a payment for goods and services. Here you can be sure of: the prices are rising and aren’t going to stop the average food basket for the year 2016 will rise by no less than 11-12%, and the technique, most likely, and the stronger (here, the retailers tried to keep costs in check, so we are waiting for a pending price increase). But the new bill has nothing to do with it.
The practical meaning of innovation of the Central Bank is obvious. The new banknotes will simplify cash payments, would increase the possibility of payment for the goods without putting in the outlets, reduce the wear and tear of the most running now and thousandths hundred-ruble banknotes (the more in circulation banknotes of different denominations, the greater “shelf-life” of each of them). Degree of protection 200 – and 2000-ruble notes also will probably be greater, than at modern Russian cash, which will reduce the percentage of fakes.
It is significant that the Central Bank rejected the proposal to introduce also the denomination face value in 10 thousand. In fact, a denomination in 5 thousand roubles until recently was one of the most full-bodied among having a real walk in the world: 500 euros, of course, but one and a half times more than 100 dollars. Even slightly impaired, it now suffices for almost all purposes. Moreover, in Russia there are whole communities which have never seen this thick orange bill. With regard to major transactions, the Central Bank has long fought with cash payments and make life easier for fans of black money is not going.
Minus two zero
In addition to the devaluation, there is another possible course, which in recent time many say. Neighboring Belarus is preparing for its denomination of the ruble, but the country has long become an experimental area for testing the sharp solutions for the possibility of their application in Russia (note the supporters of maintaining the current retirement age!).
But today in Russia there is no inflation, there is no such depreciation of the ruble that would justify costly and psychologically very unpleasant denomination of the national currency. Yes, it is possible to remove from the banknotes two zero, however, agree to cash payments only in rubles, without the pesky small cents very convenient.
In total, since Peter I only denominations have strengthened the Russian currency in 5 quadrillion times, but all these achievements were destroyed by inflation and in reality Petrovsky ruble stronger modern thousands. Even taking him for a thousand, we can say that in just three years the ruble was devalued in 5 quintillion (5 000 000 000 000 000 000). This was mainly due to the catastrophic fall of the national currency in 1916-1925 and 1990-1999, and the creeping devaluation nor for a moment did not leave their dirty work.
And in this context, the announcement of the new banknotes also looks a positive step: if the Central Bank prepared the denomination, he’d explicitly decided not to develop and release notes of the current, non-denominated values. Accordingly, for any suspicion of the reason is simply no.
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But the country’s leadership should think: if even normal actions by the Central Bank cause people panic, maybe we should think about the reputation of the Bank, on the degree of credibility, the professionalism of its top?
