Russian shoppers have reacted calmly to the re-denomination of their currency, which saw three zeroes lopped off the ruble on January 1. Because the New Year holiday has been followed by Orthodox Christmas, most shops have been closed and few people have so far gotten their hands on the new ruble notes, which are only slowly entering circulation. The new bills look just like the old ones, except that three zeroes have been eliminated.
On three occasions in the past, Soviet and Russian citizens have been cheated out of their savings by currency reforms ordered by their governments. This time, the government has taken elaborate precautions to ensure that the confidence of the population in the currency is not shaken. The old ruble notes are to circulate alongside the new ones for the rest of this year, and can be exchanged for the new currency any time until January 1, 2002. In the initial period, shop prices must be expressed in both old and new forms. The Central Bank predicts, however, that about 90 percent of the old banknotes will pass out of circulation during the first three months of this year and that old bills will have virtually disappeared by the summer.
There was some initial panic last year when the redenomination was first announced, and the rate at which Russians were exchanging rubles into dollars went up for a while. Russians were accordingly reported to have converted 21.4 percent of their cash incomes into foreign currency last year, compared to 18.4 percent in 1996, but there has since then been such an intense publicity campaign explaining the redenomination that people are by now largely used to the idea. The ruble stood officially yesterday at 5.97 to the dollar. (RTR, BBC World Service, January 5)
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