Ruble denomination in Belarus: why four zeros will disappear. Whose ruble is stronger? Will coins be removed in Belarus?
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 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 in. From January 1, 2022, banknotes of the 2000 model will be considered invalid.
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Denomination is a technical operation with national currency, consisting of replacing government banknotes in circulation with new ones, while simultaneously reducing their denomination. As a rule, for convenience of calculations, the nominal value is reduced by a multiple of 10, i.e. “zero trimming” occurs.
Although there should not be an actual decrease in the money supply during denomination, a decrease in denomination makes it possible to simplify settlement transactions and make monetary units psychologically more convenient and understandable to the average user.
All prices and amounts of financial transactions during denomination must change in accordance with changes in the denomination of monetary units. Small deviations are allowed to round off the obtained figures.
Denomination in Belarus in 2016
On November 4, 2015, the President of the Republic of Belarus signed Decree No. 450 “On the denomination of the official monetary unit of the Republic of Belarus.” The denomination date is set for July 1, 2016. This will be the largest change in the denomination of the currency in the entire history of the Republic. It is planned to reduce it by 10,000 times. For example: a 10,000 ruble bill will be exchanged for 1 ruble, a 100-ruble bill for 1 kopeck.
This is the third denomination since the emergence of its own national currency in 1992.
The first Belarusian banknotes, the so-called “bunnies,” were printed with a denomination ten times less than that indicated in the calculations. This happened at a moment of uncertainty after the collapse of the USSR, when Belarusian rubles circulated for some time in parallel with Soviet ones. Inflation at that time was perhaps the only working economic tool. Due to the depreciation of the ruble, prices were recalculated almost monthly.
The first denomination took place in 1994, the estimated value of money decreased by 10 times. Since the non-existent zero was removed from banknotes, the banknotes were “not damaged.”
Further inflationary processes required an ever-increasing influx of money supply; bills with animals were gradually replaced by bills with buildings, with a simultaneous increase in denomination. In 1999, the denomination of the largest banknote was already 5 million rubles. For comparison, the smallest banknote, sample 1992, was 50 kopecks (“squirrel”).
As a result of the second denomination in 2000, millions became thousands, and three zeros were removed from banknotes.
The new money, although it gradually depreciated in the process of inflation (no longer as high as in the 90s), is still in circulation. As unnecessary, denominations of less than 100 rubles were withdrawn from circulation, and 200,000-dollar bills appeared.
Theoretically, the denomination should not have any effect on the rate of inflation, the price level, or the interest rate. Unfortunately, the experience of previous denominations suggests otherwise. During the year, some prices were “rounded” almost twice.
The need for the upcoming denomination was actively discussed after the threefold fall in the ruble exchange rate in 2011, however, no official decision was announced. Although, as it has now become known, work in this direction was carried out. New Belarusian money, it turns out, was printed back in 2009, and therefore bears some traces of this troubled time. Namely: the signature of the former head of the National Bank P.P. Prokopovich, the old spelling “pyatsdzesyat”, instead of “pyatsdzyasyat” - as follows from the spelling rules in force today.
The next news will be the return of metal coins to circulation. Thus, we will leave the number of countries (usually suffering from hyperinflation) that only have paper money in circulation. This also gives hope that future inflation will never be so high that the price of metal in coins becomes more expensive than their face value.
The design of future banknotes is noticeably different from the already familiar ones and “brings Belarus much closer to Europe”; the new rubles are very similar to the euro.
New banknote of the highest denomination:
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At the beginning of November 2015, the President of the Republic of Belarus signed a law on the redenomination of the official banknote in the summer of 2016. This entire denomination in Belarus has become the largest, and the news about the change of banknotes is one of the loudest in recent times. What led to the depreciation of the Belarusian currency and what will happen after the redenomination?
and why is it needed
Denomination is an economic procedure that is carried out with the aim of changing the nominal value of the national currency in order to stabilize money circulation after hyperinflation and simplify the payment procedure.
What will happen after the denomination in Belarus? During the procedure, old banknotes are exchanged for new ones, usually of lower value (face value), but with the same purchasing power. The denomination provides for the gradual withdrawal of the old currency from circulation. If this happens over several weeks, then most often not the entire money supply is exchanged, which causes additional problems associated with the subsequent inability to exchange currency and loss of funds. If several years are allotted for the procedure, when old banknotes circulate on a par with new ones, and currency can be freely exchanged for new money, then the process occurs, albeit slower, but more harmoniously and stably.
During denomination, salaries, tariffs, the cost of food and services provided, scholarships, pensions and other social benefits are recalculated. The state gets rid of excess money supply, which allows:
- further reduce the costs of issuing new banknotes of larger and larger denominations;
- simplify all calculations: both daily household expenses and monthly income of the population, as well as calculations at the state or international level;
- identify hidden incomes of the population, since in order to avoid financial losses, all savings are exchanged, and non-cash funds are transferred into cash;
- strengthen the national currency in relation to the banknotes of foreign countries.
Denomination is usually carried out after hyperinflation. In other cases, the procedure can undermine the stability of the country’s economy and negatively affect the psychological state of the population. In addition, when denomination is carried out “not according to indications,” purchasing power suffers.
In simple words about denomination
What is this? Simply put, denomination in any country in the world (including denomination in Belarus) is a process when a certain number of zeros are “removed” from a currency, depending on the scale of previous hyperinflation, that is, a sharp and significant depreciation of money.
What will happen to prices and tariffs? In connection with the procedure, all prices and payments (salaries, tariffs, social benefits, scholarships) are recalculated to new money without changes.
Why is denomination needed? The procedure makes it possible to simplify calculations, increase the status of the national currency and, in the future, reduce government costs for issuing banknotes of ever larger denominations.
Reasons for denomination in Belarus
The denomination in Belarus is carried out due to hyperinflation. The country has been experiencing a depreciation of the national currency since independence. From 1992 to 2012, the monetary unit depreciated 237.5 million (!) times, which is almost 12 million percent per year. However, hyperinflation in Belarus is not so “stable”: the highest percentages occurred in the 1990s, and in the 2000s, inflation could be more than fifty percent per year. For comparison: the normal inflation rate is considered to be 3-5% per year.
A rather strange situation has become the reason that every first resident of Belarus can rightfully consider himself a millionaire. One pair of high-quality jeans, for example, cost a little more than one million Belarusian rubles, and the average salary of a doctor was six million.
What will be the denomination in Belarus?
The redenomination in 1994 made it possible to remove only one zero from the national currency in relation to the 1993 banknotes. In 2000, one thousand was exchanged for one ruble, and in 2016 the exchange ratio will be 1 to 10,000.
A similar situation occurred only in one of the union republics. Thus, in 1995, Georgia reduced the value of the national currency by a million times, but it is also far from Belarus, where the ratio of the 2016 ruble to the 1993 currency was 100 million times.
What will happen after the 2016 denomination? The denomination of the ruble in Belarus in 2016 involves “reducing the number of zeros” on banknotes by 4. Thus, if a certain product previously cost 1,000,000 rubles, now its price will be 100.
Timing of the economic procedure
Money denomination in Belarus will be carried out until the end of 2021. The process started on July 1, 2016 and includes the following stages:
- until December 31, 2016, money exchange is carried out without restrictions, the old and new currency are in parallel circulation;
- until December 31, 2019, exchange will be possible in banks and non-banking organizations;
- until December 31, 2021, it will be possible to exchange old banknotes for new ones only at the National Bank.
Until the end of this year (2016), sellers are required to indicate two prices simultaneously: the cost of goods and services before and after denomination.
What will the new banknotes be like?
Each of the new banknotes will be dedicated to one of the six regions of the country and the capital. When developing the design, images of architectural monuments were used. Eight coin denominations have also been prepared. according to the President of the Republic of Belarus, “they are somewhat reminiscent of the euro.”
Even the National Bank indicated in its official statement that the new banknotes are somewhat unusual (“have some features”). Firstly, there will be a spelling error on the fifty-ruble bill, and secondly, P. Prokopovich, who no longer holds this post, will be indicated as the head of the National Bank on the new banknotes. Such confusion resulted from the fact that preparations for a large-scale denomination in Belarus began back in 2008, when part of the banknotes were printed, but the global financial crisis prevented the plan from being carried out. Since then, the republic has managed to carry out a language reform and change the head of the National Bank.
Rate against other currencies
What will happen after the redenomination in Belarus in relation to other currencies? Some online converters currently consider the exchange rate to be the same as before the denomination, others have already “rebuilt”.
At the moment, one ruble costs 33 Russian or 13 hryvnia. One dollar after redenomination in Belarus costs a little less than two rubles, one euro - a little more.
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.
