UNIVERSITY OF ENGINEERING & TECHNOLOGY

INSTITUTE OF BUSINESS & MANAGEMENT MONEY AND BANKNG

HISTORY OF RUSSIAN MONEY

SUBMITTED TO: SIR FARMAN SUBMISSION DATE: February 27, 2012

SUBMITTED BY: Ahmad Asghar Nimah Saeed Amna Shaukat Afza Rabbani 51 81 94 78

Introduction of the Assignment

This assignment is about the history of the ruble currency of Russia. The assignment is in group. All the members collaborate with each other in concluding the assignment. The assignment is divided into different steps accordingly so that the reader can easily pass through information and get maximum information out of it.

BRIEF HISTORY OF RUSSIAN MONEY:

Money:
A medium that can be exchanged for goods and services and is used as a measure of their values on the market, including among its forms a commodity such as gold, an officially issued coin or note, or a deposit in a checking account or other readily liquefiable account.

HISTORY:
Russian Ruble is the official currency of Russian Federation. It is also used as a medium of exchange in many former soviet republics. Russian ruble is one of the world's oldest currencies. It appeared in 15th century during as called Silver Bum. At the time, Russian coins were made of silver. Soaring demand for silver across continental Europe resulted in growth of value of Russian silver coin to a point when they were no longer useful for purchases. People started splitting coins in halves. Russian word for "split" or "cut" is rubit'' and the half coins were called rubles. Even though Russian coins no longer come in halves, the name stuck on. During the czar rule Russian rubles were one of the worlds highly valued currencies as they were backed by serious stockpiles of gold. During the Bolshevik revolution, most of that gold was shipped out of Russia, so the Soviet rubles did not have much value. It did not matter anyway as the Soviet rules kept fixed rate of ruble. In 1993 Russian government has removed price fixing, but it continues to intervene into currency markets to keep the value of ruble at a lower rate than it actually is to stimulate Russian export producers.

FROM SOVIET RUBLE TO RUSSIAN RUBLE

Democratic revolution of 1991 led to abandonment of price fixing. "The shock therapy" resulted in immediate plunge of national currency as former soviet republics continued to print Russian rubles and exchange them for Russian goods creating inflation in Russia and devaluing its currency. Inflation was as high as 1000% per year! By mid 90s Russian authorities announced that they would no longer allow now formally independent countries to print Russian national currency. Russian ruble grew steadily until 1998 when the Asian financial crisis moved on to Russia. Value of ruble dropped four times overnight and has not changed ever since.

CURRENT RUSSIAN CURRENCY RATE:

With the changing economic bodies of the world the overall synerio has been changed. If you need help arranging currency exchange for your trip to Russia we will be glad to assist you. Our representative will come to you hotel in Russia and exchange dollars for rubles at a current market rate.

RUSSIAN PAPER MONEY IMPERIAL PERIOD

The first Russian paper money was printed in 1769 during the reign of Ekaterina II. It was forced by the imperfectness of the monetary system, in which coins were the only payment method. The banknotes were printed on white paper and had watermarks. From 1786 the banknotes were printed on color paper, but were still very simple, which cause massive fraud. In the beginning of the 19th century the paper money changed the outlook to a classicism style one. Architectural images and portraits began appearing on the banknotes in the 50s and 60s, along with imperial monograms. By the beginning of the 20th century many famous painters, like Reichel, Zauerveir and Lundin, took part in banknote design. The 1912 500 ruble banknote is often named as one of the most beautiful ones in history. All the banknotes of the Imperial period were printed in Russia, with one exception of a emission printed in the USA not long before the revolution of 1917.

1769-1785
The first banknotes ever to be printed in Russia were printed in 1769. They were made to facilitate money exchange, as large sums in metal coins were hard to deal with. The notes were printed in 25, 50, 75 and 100 ruble variants. Yet, the 75 ruble note was soon put out of circulation because of fraud, as people began scraping out the word "twenty" and writing "seventy" instead. The second emission notes, dating 1774, had smaller sizes and lacked the 75 ruble one.

Preview

Serial number

Nominal

Name

Year

Comment

PA1

25

Rubles

1769

The first Russian banknote.

click to enlarge

PA7

100

Rubles

1779

click to enlarge

1786-1818
The banknotes made money exchange easier and therefore were very popular. Notes of 5 and 10 rubles were introduced. But the number of notes in circulation was so big that in the end of the 18th century their real price began decreasing. In 1790 one paper ruble was worth 87 kopeks (1/100 of a ruble), in 1796 - 79 kopeks, in 1997 - 70. The need to finance the wars led by Russia in the beginning of the 18th century led the price to sink to 25.4 kopek. At last, in 1814-1815 the price reached the bottom of 20 kopeks for one paper ruble. Only the fact that all payments to the state were obligatory done in paper money helped the paper ruble to maintain a constant (thought still very low) exchange rate.

1818-1865
The new banknotes looked somewhat more reliable. But it didn't help their price, which was still about 3-4 times lower than the indicated value. The 1843 banknotes replaced the earlier ones. With this emission their price was at last equal to the silver money. Alas, the Crimean war led to printing much of paper money and its price went down again.

1866-1880
These are the first russian money to have portraits on them. On the notes are: Dmitry Donskoy, Mikhail Fedorovich - the founder of the Romanov dynasty, his son Aleksey Mihailovich, his grandson Peter The Great and empress Ekaterina II The Great. The latter two will stay on the banknotes for a long time, until the 1917 revolution.

1882-1886
The banknotes of this emission differ from the previous ones by the replacement of the Alexander II monogram by the one of Alexander III, as Alexander II was killed in 1881.

1887-1896
The 1, 3, 5, 50 and 100 rubles banknotes printed during this period looked very alike. The only difference present is the change of the monogram of Alexander III to the on of Nikolai II in 1895. The notes of 5 and 10 rubles changed their orientation from horizontal to vertical. The note that changed is the 25 rubles one. It was printed using the new "orlovsky" method, allowing printing all the colors simultaneously. The color shifts made using this technique were almost impossible to repeat using handicraft methods, thus the banknote was much more protected from fraud.

1898-1899
This emission is interesting mainly by the 1 ruble note. It was printed identically for almost 20 years, with the same year on the note: 1898. There were five series. The first four differ by the signature: Pleske up till 1903, Timashev until 1909, Konshin until 1912 and Shipov until 1917. On the notes from the fifth emission, instead of the full note number only the series number was printed. Those were printed even after the Revolution of 1917. The 1899 50 ruble note had no watermarks, as the "orlorvsy" method of printing made it almost impossible to fraud.

1905-1917
The banknotes of this period, as of the previous one, differ only by the signature on them. The ongoing war led not only to inflation, but also to lack of metal money. Therefore, paper banknotes with the value from 1 to 50 kopeks. But printing was not cheap, and soon the banknotes were replaced by postal stamps. The difference between the real postal stamps and the ones used as paper money was in a plainer paper and printing on the obverse side. In 1917 the dual-headed eagle was removed from the obverse.

RUSSIAN PAPER MONEY USSR PERIOD

The paper money of the USSR period underwent many emissions and changed its outlook very much. Most of it was printed on white paper and had watermarks, but the format and style of different series varies very much. For example, the 1918-1922 series are quite simplistic, while the 1923 one continues the traditions of the Imperial period. From 1925, the banknotes contained, in addition to the state symbols, pictures of people and their life (the worker and the farmer reading Karl Marx, a seeder, scenes of harvest, etc.). In 1937 for the first time Lenin himself appeared on the notes, and stayed there until 1992.

1918
The so called credit tickets of 1918 were printed using stamps made before the revolution of 1917. Therefore the emblem is still the dual-headed eagle, and not the sickle and hammer, thought without the royal regalia.

1919
The communist theory proclaims the liberation from money, so printing money was quite a questionable matter at that time. The solution was quickly found, thought. The banknotes of the 1919 were named "payment token" (literal translation). They are the first ones to have the RSFSR emblem on them.

1921
As more and more money was printed the notes became simpler. Due to the unstoppable inflation the value printed on the money rose to the yet unseen numbers of 25, 50 and 100 thousand rubles. The only other time such nominals will appear on the notes will be in 1993.

1922
In 1922 the ruble was denominated by 10000 times, and the word "money" appeared on the notes again. The communist idea of eliminating money was once again forgotten.

1923
The inflation led to another denomination, with a rate of 100 this time. The 1923 notes circulated until spring 1924, when they were changed to "golden" rubles with a rate of 50,000 to one. For the 1922 ones the rate was 5,000,000 to one, and 50,000,000,000 for the pre1922 notes.

1924-1928
1924 was the year of a money reform. It was decided to exchange all of the circulating money for the new treasury notes. The notes from 1 to 50 kopeks were printed to reduce the lack of metal money (the treasury didn't have time to mint it), and were put out of circulation by 1927

1934
The treasury notes of 1934 came in two flavors: with the treasurer signature and without. The signature was indeed quite disturbing. If the treasurer was declared "enemy of the state" all the banknotes with his signature were to be removed from circulation, which was quite a problem. Thus the signature was removed until 1992 (and then removed again in 1993).

1937
The banknotes of this issue are marked by the arrival of Lenin to the obverse of the note, where he stayed until 1993. One more particularity is the replacement of the text about the gold equivalent of the note by abstract words of it being secured by the actives of the state bank.

1938
The 1938 notes are marked by the lack of watermarks on them. The 5 ruble note was to have a picture of a woman with children. Then it was supposed to have a woman parachutist. In the final project we can see a pilot

1947
1947 was the year of another money reform, quite strange this time. The money was changed in a rate of 10 to 1, while the prices remained the same. There were two varieties of the banknotes of this series. They are distinguished by the number of the turns of the ribbon on the emblem: 16 in 1947 versus 15 in 1957

1961
And one more money reform happened in 1961, the money nominal reduced 10 times again. But this time the reform was for good. Those banknotes lasted the longest in the history - until 1991. The only banknote changed during this period war the 1 ruble, and the change was minor: the height of the serial number changed from 3.5 mm and 2.5 mm to 4 and 3 mm for the big and small letters. The other banknotes were printed unchanged

1991
In 1991, for the first time in 30 years, new banknotes were printed. The first ones were 50 and 100 rubles banknotes. They were supposed to replace the 1961 ones by January, and the maximum exchange amount was 150 rubles per person. Later the increasing inflation led to printing 200, 500 and then 1000 ruble notes. The small notes underwent small cosmetic changes, like the addition of a white field on the left side and the removal of text in regional languages. The 100 ruble note watermark was changed by removing Lenin and placing a rose instead

1992
In 1992 the watermarks on all banknotes were change to replace Lenin with stars. The newly formed Bank of Russia printed 5000 and 10000 ruble notes

RUSSIAN PAPER MONEY CONTEMPORARY PERIOD

Russian money of the new poque (after 1992) differs from the previous series by the disappearance of the Lenin portraits (which lasted 55 years). In 1992 another revolution happened in Russia, the single-party system was replaced by a democratic system. The money started baring pictures of cities. Until 1993 it was Moscow, and starting with 1995 more (Saint-Petersburg, Vladivostok, Novgorod, Krasnoyarsk, Yaroslavl and Archangelsk). During the devaluation of 1998 the value of the notes lost three zeros, but the note design remained the same.

1993
From 1991 until 1995 new notes appeared every year and 1993 was not an exception. New 100, 200 and 500 rubles notes appeared to begin with, followed by 1,000, 5,000 and 10,000 ones. At last the 50,000 appeared. By that time in was found that the last three (5, 10 and 50 thousand) banknotes were exactly the same size and printed on the same paper. Immediatly fraud began, erasing 5,000 notes and printing 50,000 on top of them. The bank had to withdraw all of them and replace by the new ones, differing by watermarks and paper color

1995
In 1995 a whole new series of banknotes appeared. They were much more protected against fraud, and had signs for the blind. On the 500,000 banknotes we once again can see Peter the great, only this time in the form of a statue.

1997
In the beginning of 1998 a new, the last for today, money reform had place. The banknotes lost three zeros and received new protection measures. The 1 ruble banknote was not printed, but in 2001 a new 1,000 ruble one appeared.

CURRENT
Currently in circulation are the banknotes from the 1997 series, with the addition of the 5,000 note.

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