Denominated Belarusian rubles. Whose ruble is stronger? In simple words about denomination
More recently, literally in July last year, another redenomination of the ruble took place in the Republic of Belarus. It is worth noting that she was not the only one, because after the collapse of the Soviet Union, the denomination was carried out 4 times. The latest monetary reform has significantly simplified the payment system in Belarus, because before it it was almost impossible to comfortably use monetary units. Let us answer the question why the denomination of money occurred in Belarus in 2016, its causes and consequences.
What is the purpose of denomination?
If we say in simple words what denomination is, then in fact it is just a change in the nominal value of the national currency. This procedure is used to facilitate the settlement system, as well as to stabilize the economic situation within the state after an economic crisis or hyperinflation.
If we talk about the reasons for denomination in general, then when it is carried out, the ratio of money changes, in this case in Belarus it changed 1 to 10,000, and in Russia in 1998, the nominal value of the national currency decreased by 1000. Accordingly, after these events, the entire cost of goods and services also decreased by 10,000 times. Why is a regular denomination needed:
- to establish the national currency in relation to the world one;
- identify hidden incomes of the population;
- simplify the payment system;
- reduce the cost of issuing new banknotes.
Note that in most cases, monetary reforms are carried out during a crisis or after hyperinflation in order to restore the domestic economy.
Historical reference
As mentioned earlier, denomination was carried out in the Republic of Belarus more than once, and this was only after the collapse of the USSR. The first monetary reform was carried out in 1992, when 1 zero disappeared from the nominal value of the national currency. At that time, Belarusian rubles had an original design, because they were decorated with images of animals, and people called them “bunnies.”
The second monetary reform was not long in coming, and was carried out 2 years after the first, then another zero disappeared from the national currency. But at that time, after leaving the USSR, Belarus gained independence and never carried out economic reforms, which led to inflation, so by the beginning of the new century, the need arose again to redenominate the currency, then the ratio was 1 to 1000.
The last denomination of the Belarusian ruble in 2016, as mentioned earlier, banknotes became 10,000 times smaller. One only has to think about the fact that before the reform, there were bills of 2 and 5 million Belarusian rubles in circulation on the territory of the state, and if translated into modern money, then these are 200 and 500 rubles, respectively.
Please note that today the exchange rate of the Belarusian ruble against the Russian ruble is 1 to 30.57, and the Belarusian ruble to the Russian ruble before the redenomination was approximately 0.003057 to 1.
Reasons for currency reform
Undoubtedly, the main reason for the redenomination, including in Belarus, is the rapid growth of inflation in the country. Although the government of the country explains the reform by saying that the need to reduce the number of zeros on banknotes is due to the fact that they are extremely inconvenient to handle. In general, the denomination, as the government promises, will not affect the purchasing power of goods and services and will not harm the well-being of the citizens of the republic.
Currency of Belarus before and after denomination
But it is also worth noting that inflation also occurs here, which, in essence, is associated with economic stagnation and the need to make internal changes. Although, according to President Lukashenko himself, the country’s economy is stable and the renewal of the national currency will not lead to devaluation, which means that the residents of the state have nothing to fear.
Please note that monetary reform in Belarus is of a technical nature and will not affect purchasing power in any way.
Progress of reform
The order on the denomination of the official currency of the Republic of Belarus was signed by the President of the Republic on November 4, 2015, and the reform itself began on July 1, 2016. To completely remove old banknotes from circulation, approximately six months have been allocated until the end of 2016. Money on the territory of Belarus was withdrawn gradually, that is, citizens could pay with both old and new banknotes, and the remaining savings could be exchanged at the bank.
The peculiarities of this reform are that before it was carried out, only paper bills would have been in circulation. And today residents of Belarus have the opportunity to use coins in denominations of 10, 20, 50 kopecks, 1 and 2 rubles. Among paper banknotes, banknotes in denominations of 5,10, 20, 50, 100, 200 and 500 rubles today decorate the cities of Belarus.
It is noteworthy that the currency reform has been planned since 2009. It was then that the development of the design of new banknotes began. The official version of the denomination appeared in 2014, it was voiced by President Lukashenko during an interview with Belarusian journalists.
Consequences of the reform
The denomination in Belarus in 2016 did not bring any negative consequences for the population. First of all, it should be noted that this monetary reform was indeed necessary primarily for the common population. In addition, accountants and financial workers received great benefits from it. In addition, President Lukashenko himself promised to “tear off the head of everyone who raises prices for goods,” which means that the population of Belarus only benefits from the reform.
Let's summarize that the monetary reform in Belarus is just changes that are of a technical nature and are not related to the internal economic crisis, although the inflation rate in the country exceeds acceptable limits and amounts to 15-18% per year. In any case, the reduction of zeros in the denomination of the monetary unit has made life much easier for Belarusians. After all, just imagine, in order to make any major purchase, residents of the country literally had to carry a bag with money with them, because, as mentioned earlier, the exchange rate of the Belarusian ruble to the ruble before the redenomination was 0.003057 to 1.
In the summer of 2016, work began in Belarus on the largest denomination for the state. The old “bunnies” lost 4 zeros at once, so jokes about millionaires are a thing of the past. The reasons for the redenomination are quite clear; rapid inflation and huge denominations make calculations difficult.
The country prepared for this process a long time ago, and the first new banknotes and coins appeared back in 2009.
With the release of the first batches of new rubles, the country faced crisis problems, and the process of transition to the new money had to be postponed.
In this article, we will take a detailed look at the new Belarusian money and coins.
What is a denomination?
Denomination– reduction of the denomination of money to simplify payments.
For Belarus, such a process has been asking for a long time, so long ago that local residents have become accustomed to their money, and tourists are in some shock when they have to pay several thousand just for travel.
They reduced the denomination of money by 10 thousand, that is, 10,000 turned into 1 ruble, 100,000 - 10 rubles, and so on.
The first denominated ruble appeared in banks in 2016, on July 1, on the same day all prices were recalculated to new ones, this applies to both social services and other systems of the country.
The denomination of the Belarusian ruble takes a very long time, so at first Belarusians will have to get used not only to the new denominations, but also to the fact that along with the new ones, some of the old money remains in circulation.
New Belarusian rubles
It is impossible to introduce new denominations without new banknotes. Now Belarus has its own banknotes and new coins.
The appearance of the banknotes has a traditional content, with paintings of outstanding architectural buildings in various areas, as well as thematic collages dedicated to art.
In general, the design of the banknotes is more reminiscent of the new European money, this is not surprising, because the appearance was created thanks to an artist from the EU countries.
Money is also printed abroad, or rather in the UK.
In the photo below, you can see in more detail what the new Belarusian money now looks like.
5 rubles
Junior parity of banknotes. On one of the sides there is a drawing of the Kamenets Tower. On the back there is an image of the life of the Slavs in ancient times.
10 rubles
The front part is the Transfiguration Church, in the Vitebsk region. The reverse is a picture of the themes of printing and education.
20 rubles
The face is the Rumyantsev Palace, the back is the theme of spirituality.
50 rubles
Considering that the first batches contain 50 rubles of the 2009 model, some of the money will be in circulation with an incorrectly written denomination.
The fact is that, according to the new rules, the spelling of the number 50 has changed, this will be reflected in the new editions, but they decided to leave the old ones in circulation.
Face – Mir Castle, Grodno region, back – various images corresponding to the theme of art.
100 rubles
The face is the Radziwill Castle in Nesvizh. The focus is theater and folk festivals.
200 rubles
The museum in Mogilev on the front side and at the back - elements of urban planning and various crafts.
500 rubles
Senior parity, on which the National Library of the city of Minsk is drawn. On the reverse side there are elements closely related to the themes of literature.
Having studied the photos of the new banknotes, you can see that the year 2009 is written on them. It was this year that a new design of money was approved and the first samples were printed for release into circulation, but the process was slightly delayed.
They decided to leave the appearance and old banknotes for redenomination and gradually introduce fresh batches.
New Belarusian kopecks
In addition to banknotes, new coins also appeared. Belarus does not have its own mint and does not intend to create one. The coins were brought to the country from Europe, or rather from Lithuania and Slovakia.
The new Belarusian ruble and other coins, at the time of their appearance in circulation, had noticeable destruction of the metal. The National Bank noted that this drawback is typical only for the first batches; in new batches, the characteristics of the metal will change.
A total of eight denominations appeared, which we will look at in detail in the photo:
Obverse coins - a single one, in the center - the state emblem, under it - the inscription Belarus and at the very bottom - the date of minting.
1 kopeck
In the center there is a large number 1, on the right is the denomination, on the left is an ornament (a symbol of wealth).
2 kopecks
Copper plated steel base.
The number 2 is in the center, on the right is the denomination, on the left is the ornament (a symbol of wealth).
5 kopecks
Copper plated steel base.
Big number 5 in the middle. On the right is parity, an ornament (symbol of wealth) in the center of the curl of the number itself.
10 kopecks
Large number 10, on the right - dignity, ornament (symbol of fertility) in the center of the number 0.
20 kopecks
Steel disc coated with an alloy of brass and copper.
Large number 20, on the right - dignity, ornament (symbol of fertility) in the center of the number 0.
50 kopecks
Steel disc coated with an alloy of brass and copper.
The large number is 50, on the right is the dignity, the ornament in the center of the number 0.
1 ruble
Steel coin with cupronickel outer layer.
1 Belarusian ruble has a large number one in the center, the denomination on the left, and an ornament on the right, symbolizing the desire for freedom and happiness.
2 rubles
Steel base for outer ring and inner disc. In the center there is a nickel silver coating, on the outside - brass.
As you can see in the photo, the coin has a different obverse. On the front part of this sample there is the country's coat of arms (central disk), the year of issue on the bottom on the brass ring, on top - Belarus, on the right and left is the "Bagach" ornament. On the reverse there is a denomination and an ornament, which is a symbol of man’s desire for freedom.
As of July 1, 2016, the famous joke no longer makes sense:
– Do you want to become a millionaire? Go to Belarus...
We arrived in the Republic of Belarus on June 28, before the denomination of the Belarusian ruble began. At this moment, the exchange rate of the Russian ruble to the Belarusian ruble was 1 to 312.
In the lobby of our sanatorium building, every day local entrepreneurs sold various goods made in Belarus. My wife looked for some clothes and asked me to give her a million to buy.
- Am I a millionaire? – I was surprised.
In the photo there are 4 million 420 thousand Belarusian rubles before denomination.
Paritetbank, which has its own branch on the territory of the Krinitsa sanatorium, closed at 15.00 on June thirtieth, and opened exactly one day later at 15.00 on July 1st. They said that during this period all banks in the Republic of Belarus were not working, it was impossible to withdraw money from ATMs or pay for purchases with a bank card. We exchanged enough cash in advance so we didn't have any problems.
During denomination in Belarus, old and new money circulate equally.
This creates some confusion. You pay for the purchase with old money, the change is given partly with new money, partly with old money. Instead of 100 thousand old ones, they give 10 new rubles (four zeros were removed from the banknotes). It is especially difficult to count pennies. If 10 thousand old is a ruble, then 100 rubles is a penny.
In stores and at checkouts everywhere there are tables for converting the denomination of old banknotes into new ones.
Price tags in stores indicate two prices, in new and old banknotes.
In one store, the saleswoman made a mistake and stamped on the receipt, instead of the price in new banknotes, the price in old bills. Then she apologized for a long time, she gave us the correct change, but she herself had to deal with her superiors.
I noticed that in the first days there were very few new kopecks in stores, so everywhere they gave change in old money. You give, for example, five new rubles, and in return you receive change of several thousand old ones. All this is of course very inconvenient and a little annoying when doing calculations.
The situation will probably change when the majority of people receive salaries and pensions in new money, and old banknotes begin to be withdrawn from circulation.
When we left, for one Russian ruble they gave three kopecks of new Belarusian rubles.
In Belarus, a denomination will be held on July 1, 2016. The corresponding decree No. 450 “On the denomination of the official monetary unit of the Republic of Belarus” was signed by Alexander Lukashenko on November 4.
According to the press service of the National Bank, “The denomination process is of a technical nature and will not affect the purchasing power of the Belarusian ruble, the exchange rate of the national currency against foreign currencies, as well as the actual level of inflation.”
Banknotes of the 2000 model will be withdrawn from circulation. They will be replaced with banknotes and coins of the 2009 model in the ratio of 10 thousand “old” rubles to 1 “new” ruble.
Banknotes in denominations of 5, 10, 20, 50, 100, 200 and 500 rubles, as well as coins in denominations of 1, 2, 5, 10, 20, 50 kopecks and 1 and 2 rubles will be put into circulation.
From July 1 to December 31, 2016, banknotes of the 2000 model and banknotes of the 2009 model will be in parallel circulation.
The exchange of banknotes of the 2000 sample for banknotes of the 2009 sample is carried out without restrictions and without charging a fee from January 1, 2017 to December 31, 2019 - in the National Bank, banks and non-bank financial institutions, from January 1, 2020 to December 31 2021 - at the National Bank.
From July 1 to December 31, 2016, manufacturers, sellers, suppliers, performers and their representatives, when providing consumers with information about the goods (works, services) offered, are required to indicate prices (tariffs) in banknotes of the 2000 model and banknotes of the 2009 model.
During the denomination, salaries, pensions, scholarships, cash balances in bank accounts, balance sheets of enterprises and institutions, etc. will be recalculated.
The new banknotes, which will be put into circulation on July 1, 2016, were manufactured by order of the National Bank back in 2008. “However, then, due to the global economic crisis and, as a consequence, the deterioration of the economic situation in our country, the denomination was postponed, and the manufactured banknotes were transferred to the Central Vault of the National Bank,”- reports the press service of the National Bank.
In this regard, on banknotes of the 2009 sample there is a facsimile of the signature of the then Chairman of the Board of the National Bank Peter Prokopovich.
In addition, the new 50-ruble banknote bears the inscription “pyatsdzyasyat”, which does not comply with the current rules of Belarusian spelling - this word must be written with the letter “ya” in the second syllable (“pyatsdzyasyat”). When producing new banknotes, these inconsistencies will be eliminated, the press service of the National Bank notes.
The general design concept of the new banknotes corresponds to the motto “My Country - Belarus”. Each banknote is dedicated to one of the regions of Belarus and Minsk. The correspondence of the area to the denomination of banknotes is determined in alphabetical order.
The image of a banknote in denomination of 5 rubles is dedicated to the Brest region, 10 rubles - to the Vitebsk region, 20 rubles - to the Gomel region, 50 rubles - to the Grodno region, 100 rubles - to the Minsk region, 200 rubles - to the Mogilev region, 500 rubles - to Minsk.
The design of the new banknotes of the 2009 series maintains continuity with the banknote series of the 2000 series in terms of the use of images of architectural and urban planning monuments.
The last denomination of the Belarusian ruble was carried out in 2000. Then three zeros were removed from banknotes. In addition, in 1994, prices and salaries were reduced 10 times (then the only means of payment was the National Bank banknote, which at face value was 10 times “heavier” than the Soviet/Russian one).
Thus, the largest new banknote of 500 rubles will correspond to the previous 50 billion rubles.
Denomination is a change in the face value of money. Usually expressed in “cutting off” a certain number of zeros from old banknotes and issuing new money of a lower denomination into circulation. Often the need for denomination arises after hyperinflation in order to simplify calculations.
The denomination of the Belarusian ruble has already occurred twice in its relatively short history. Back in 1992, new money appeared in Belarus - the well-known “bunnies”, “squirrels”, “bisons”... True, while new banknotes were being printed, inflation was doing its dirty work. As a result, prices rose significantly, and they decided to increase the denomination of the new banknotes, mentally adding 1 zero to the number on the banknote. For example, the famous bunny, which had the number “1” on it, was in practice accepted not as 1 ruble, but as 10.
Two years later, the first denomination of the Belarusian ruble took place - denomination 1994. One zero was removed from the banknotes (which, in fact, was never there), and prices for goods and services were recalculated accordingly.
Just 5 years later, Belarusians became millionaires - by 1999, a banknote with a face value of 5 million rubles was already in circulation. A decision was made on a second denomination, and the country entered the year 2000 with new money, deprived of three more zeros.
And recently the crisis year of 2011 struck. The ruble has depreciated three times (and by today - almost four times), inflation in one year exceeded 108%. The National Bank issued a banknote with a face value of 200,000 rubles, and senior officials began to carefully pronounce the word “denomination” out loud.
And in October 2013, President of Belarus Alexander Lukashenko openly stated that the new money had already been printed and was in the warehouse. And the head of the National Bank, Nadezhda Ermakova, has repeatedly spoken about carrying out a redenomination after the economic situation in the country has stabilized. But when exactly the third Belarusian denomination will happen is still unclear.
According to President Lukashenko, in order to carry out a redenomination, “there should not be such an interest rate, there should be no anxiety in the market, so that the population does not worry.”
Nadezhda Ermakova agrees with him: “We need to restore the entire economy, put the entire monetary system in order, so that our interest rates are normal, then we can talk about redenomination. Any denomination still leads to increased inflation.”
Denomination, although it does not affect the fundamental principles of the economy, can indeed lead to higher prices. The psychological effect of denomination is often expressed in increased consumption by the population, which, in turn, leads to inflation.
On November 4, 2015, by Decree of the President of the Republic of Belarus, a decision was made to carry out the denomination of the national currency. The denomination in Belarus was carried out on July 1, 2016, with the current 10 thousand Belarusian rubles being equal to 1 Belarusian ruble of the new standard. Accordingly, prices for goods after the denomination lost 4 zeros to current prices.
After the denomination, the Belarusian ruble decreased immediately by 10,000 times, and banknotes of the 2000 model in circulation are gradually being replaced by banknotes and coins of the 2009 model. Thus, 100 rubles, the lowest denomination of the banknote, will be replaced by the lowest denomination of the new banknote - 1 kopeck.
In total, seven denominations of banknotes appeared in circulation - 5, 10, 20, 50, 100, 200 and 500 rubles, and eight denominations of coins - 1, 2, 5, 10, 20 and 50 kopecks, as well as 1 and 2 rubles.
After the denomination on July 1 in Belarus, until the end of 2016, banknotes of the 2000 and 2009 samples were in parallel circulation and were mandatory for acceptance when making all types of payments without restrictions. Since the beginning of 2017, Belarus has completely switched to new banknotes.
In Belarus, the procedure for exchanging old-style banknotes has been determined. Old money can be exchanged for new ones at the National Bank, banks and non-bank financial institutions of the Republic of Belarus from January 1, 2017 to December 31, 2019 inclusive. From July 1, 2020 to December 31, 2021 inclusive, banknotes will be exchanged only at the National Bank of the Republic of Belarus. From January 1, 2022, banknotes of the 2000 model will be considered invalid.
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