In addition to standard banknotes, the Soviet ruble was available in the form of foreign rubles (Russian: инвалютный рубль); also, several forms of virtual rubles were used for inter-enterprise accounting and international settlement in the Comecon zone. Many of the ruble designs were created by Ivan Dubasov.
The word "ruble" is derived from the Slavic verb рубить, rubit', i.e., to chop. Historically, "ruble" was a piece of a certain weight chopped off a silveringot (grivna), hence the name.
Ruble in the Soviet Union
The Soviet currency had its own name in all Soviet languages, sometimes quite different from its Russian designation. All banknotes had the currency name and their nominal printed in the languages of every Soviet Republic. This naming is preserved in modern Russia; for example: Tatar for ruble and kopek are sum and tien. The current names of several currencies of Central Asia are simply the local names of the ruble. Finnish last appeared on 1947 banknotes since the Karelo-Finnish SSR was dissolved in 1956.
The name of the currency in the languages of the 15 republics, in the order they appeared in the banknotes:
The first ruble issued for the Socialist government was a preliminary issue still based on the previous issue of the ruble prior to the Russian Revolution of 1917. They are all in banknote form and started their issue in 1919. At this time other issues were made by the white Russian government and other governing bodies. Denominations are as follows: 1, 2, 3, 5, 10, 15, 25, 50, 60, 100, 250, 500, 1,000, 5,000, 10,000, 25,000, 50,000, 100,000. Short term treasury certificate were also issued to supplement banknote issue in 1 million, 5 million, 10 million rubles. These issue was printed in various fashions, as inflation crept up the security features were few and some were printed on one side, as was the case for the German inflationary notes.
In 1918, state credit notes were introduced by the R.S.F.S.R. for 1, 3, 5, 10, 25, 50, 100, 250, 500, 1,000, 5,000 and 10,000 rubles. These were followed in 1919 by currency notes for 1, 2, 3, 15, 20, 60, 100, 250, 500, 1000, 5000 and 10,000 rubles. In 1921, currency note denominations of 5, 50, 25,000, 50,000, 100,000, 1,000,000, 5,000,000 and 10,000,000 rubles were added.
Second Soviet ruble, January 1, 1922 - December 31, 1922
Silver ruble of 1922
In 1922, the first of several redenominations took place, at a rate of 1 "new" ruble for 10,000 "old" rubles. The chervonets (червонец) was also introduced in 1922.
Only state currency notes were issued for this currency, in denominations of 1, 3, 5, 10, 25, 50, 100, 250, 500, 1,000, 5,000 and 10,000 rubles.
Third Soviet ruble, January 1, 1923 - March 6, 1924
A second redenomination took place in 1923, at a rate of 100 to 1. Again, only paper money was issued. During the lifetime of this currency, the first money of the Soviet Union was issued.
The first coinage after Russian civil war was minted in 1921-1923 with silver coins in denominations of 10, 15, 20 and 50 kopecks and 1 ruble. Gold chervonets were issued in 1923. These coins bore the emblem and legends of the RSFSR (Russian Federated Soviet Socialist Republic) and depicted the famous slogan, "Workers of the world, Unite!".
As with the previous currency, only state currency notes were issued, in denominations of 50 kopeks, 1, 5, 10, 25, 50, 100, 250, 500, 1,000, 5,000 and 10,000 rubles. In early 1924, just before the next redenomination, the first paper money was issued in the name of the USSR, featuring the state emblem with 6 bands around the wheat, representing the language of the then 4 constituent republics of the Union: Russian SFSR, Transcaucasian SFSR (Azerbaijani, Armenian, and Georgian), Ukrainian SSR and Byelorussian SSR. They were dated 1923 and were in denominations of 10,000, 15,000, and 25,000 rubles.
Fourth (Gold) Soviet ruble, March 7, 1924 - 1947
A third redenomination in 1924 introduced the "gold" ruble at a value of 50,000 rubles of the previous issue. This reform also saw the ruble linked to the chervonets, at a value of 10 rubles. Coins began to be issued again in 1924, whilst paper money was issued in rubles for values below 10 rubles and in chervonets for higher denominations.
In 1924, copper coins were introduced in copper for 1, 2, 3 and 5 kopecks, together with new silver 10, 15 and 20 kopecks, 1 poltinnik (50 kopecks) and 1 ruble. From this issue onward, the coins were minted in the name of the USSR (Union of the Soviet Socialist Republics). The "Workers of the World" slogan was carried forward. However, 1921-1923 coins were allowed to continue circulating. Copper ½ kopeck coins were also introduced in 1925. The 1 ruble was only issued in 1924 and production of the poltinnik was stopped in 1927, while the ½ kopeck ceased to be minted in 1928. Coins of this period were issued in the same sizes as the coins previously used during the Czarist period. In 1926, smaller, aluminium-bronze coins were minted to replace the large copper 1, 2, 3 and 5 kopecks, but were not released until 1928. The larger coins were then melted down. In 1931, the remaining silver coins were also replaced with redesignedcupro-nickel coins depicting a male worker holding up a shield which contained the denominations of each. In 1935, the reverse of the 10, 15, and 20 kopecks was redesigned again with a more simple Art Deco inspired design, with the obverse of all denominations also redesigned, having the slogan "Workers of the world, unite!" dropped. The change of obverse did not affect all 1, 2, 3, and 5 kopeck coins immediately, as some 1935 issues bore the "Workers of the World" design while some bore the new "CCCP" design. The state emblem also went through a series of changes between 1935 and 1957 as new soviet republics were added or created. This coin series remained in circulation during and after the monetary reform of 1947.
In 1924, state currency notes were introduced for 1, 3 and 5 gold rubles (рубль золотом). These circulated alongside the chervonets notes introduced in 1922 by the State Bank in denominations of 1, 3, 5 10 and 25 chervonets. State Treasury notes replaced the state currency notes after 1928. In 1938, new notes were issued for 1, 3 and 5 rubles, dropping the word "gold".
Fifth Soviet ruble, 1947 - 1961
Following World War II, the Soviet government implemented a confiscatory redenomination of the currency (decreed on December 14, 1947) to reduce the amount of money in circulation. The main purpose of this change was to prevent peasants who had accumulated cash by selling food at wartime prices from using this to buy consumer goods as the postwar recovery took hold. Old rubles were revalued at one tenth of their face value. This mainly affected paper money in the hands of private individuals. Amounts of 3,000 rubles or less in individual bank accounts were not revalued, while salaries remained the same.
In 1947, State Treasury notes were introduced for 1, 3 and 5 rubles, along with State Bank notes for 10, 25, 50 and 100 rubles.
Sixth Soviet ruble, 1961 - 1991
50 kopek type issued 1961-1991.
Two 10 ruble coins introduced in 1978 to commemorate the 1980 Summer Olympics
The 1961 redenomination was a repeat of the 1947 reform, with the same terms applying.[clarification needed] Newly designed notes were issued with artwork by the artist Victor Tsigal depicting scenes from Soviet life and Soviet industrial achievements. The Soviet ruble of 1961 was formally equal to 0.987412 gram of gold, but the exchange for gold was never available to the general public. This ruble maintained parity with the Pound Sterling until the breakup of the Soviet Union in 1991 when the ruble became the new currency of the Russian Federation.
The 1958 pattern series: By 1958, plans for a monetary reform were underway and a number of coin pattern designs were being experimented with before implementation. The most notable of these was the 1958 series, all struck in aluminum in denominations of 1, 2, 3, 5, 10, 15, 20, and 50 kopecks and 1, 3, and 5 rubles. These coins all had the same basic design and became the most likely for release. Indeed, they were mass-produced before the plan was scrapped and a majority of them were melted down. During this time, 1957 coins would continue to be restruck off old dies until the new coin series was officially released in 1961. This series is considered the most valuable of Soviet issues due to their scarcity.
1961 style one ruble coin
In 1961, the currency was revalued again, but this time a new coinage was introduced in denominations of 1, 2, 3 and 5 kopecks in aluminium-bronze, and 10, 15, 20 and 50 kopecks and 1 ruble in cupro-nickel-zinc. 50 kopeck and 1 ruble coins dated 1961 had plain edges, but starting in 1964, the edges were lettered with the denomination and date. All 1926-1957 coins were then withdrawn from circulation and demonetized.
In 1967, a commemorative series of 10, 15, 20, 50 kopecks, and 1 ruble was released, celebrating the 50th anniversary of the Russian Revolution and depicted Lenin and various socialist achievements. Many different commemorative 1 ruble coins were also released, as well as a handful of 3 and 5 rubles. Starting in 1991, both kopeck and ruble coins began depicting the mint marks (M) for Moscow, and (Л) for Leningrad.
In 1991, a new coinage was introduced in denominations of 10 and 50 kopeks, 1, 5 and 10 rubles. The 10 kopecks was struck in brass-plated steel, the 50 kopecks, 1 and 5 rubles were in cupro-nickel and the 10 rubles was bimetallic with an aluminium-bronze centre and a cupro-nickel-zinc ring. The series depicts an image of the Kremlin on the obverse rather than the soviet state emblem. However, this coin series was extremely short lived as the Soviet Union ceased to exist only months after its release. It did however, continue to be used in several former soviet republics, particularly Tajikistan for a short time after the union had ceased to exist out of necessity.
The economy of the Soviet Union was a government-controlled planned economy, where the government controlled prices and the exchange of currency. Thus, its role was unlike that of a currency in a market economy, because distribution of goods was controlled by other mechanisms than currency, such as centrally planned quotas, queuing or blat. Only a limited set of products could be freely bought, thus the ruble had a role similar to trading stamps or food stamps. The currency was not internationally exchangeable and its export was illegal. The sudden transformation from a Soviet "non-currency" into a market currency contributed to the economic hardship following the collapse of the Soviet planned economy.
Replacement currencies in the former Soviet republics
Shortly after the fall of the Soviet Union in 1991, local currencies were introduced in the newly independent states. Most of the new economies were weak and hence most of the currencies have undergone significant reforms since launch that included change of names and denominations.
In the very beginning of the post-Soviet economic transition, quite a lot of people[who?] and institutions (including the International Monetary Fund) believed in the possibility to maintain the common currency working for all or at least for some of the former Soviet Union’s countries.
Political considerations were one reason for this advocacy. Certain politicians were hoping to rebuild the former Russian empire in some way, or at the very least, maintain "special relations" among former Soviet republics, or the "near abroad" as they came to be known in Russia. Another reason were the economical considerations for maintaining the ruble zone. The wish to preserve the strong trade relations between former Soviet republics was considered the most important goal.[who?]
The break-up of the Soviet Union was not accompanied by any formal changes in monetary arrangements. The Central Bank of Russia was authorized to take over the State Bank of the USSR (Gosbank) on 1 January 1992. It continued to ship USSR ruble notes and coins to the central banks of the fourteen newly independent countries, which had formerly been the main branches of Gosbank in the republics.
The political situation, however, was not favorable for maintaining a common currency.. Maintaining a common currency requires a strong political consensus in respect to monetary and fiscal targets, a common institution in charge of implementing these targets, and some minimum of common legislation (concerning the banking and foreign exchange regulations). These conditions were far from being met amidst the turbulent economic and political situation.
During the first half of 1992, a monetary union with 15 independent states all using the ruble existed. Since it was clear that the situation would not last, each of them was using its position as "free-riders" to issue huge amounts of money in the form of credit (since Russia held the monopoly on printing banknotes and coins). Ukraine was very active in this. As a result, some countries were issuing coupons in order to "protect" their markets from buyers from other states. The Russian central bank responded in July 1992 by setting up restrictions to the flow of credit between Russia and other states. The final collapse of the ruble zone began with the exchange of banknotes by the Central bank of Russia on Russian territory at the end of July 1993. As a result, other countries still in the ruble zone (Kazakhstan, Uzbekistan, Turkmenistan, Moldova, Armenia and Georgia) were "pushed out". By November 1993 all newly independent states had introduced their own currencies, with the exception of war-torn Tajikistan (May 1995) and unrecognized Transnistria (1994).
Details on the introduction of new currencies in the newly independent states are discussed below.
The first Som was a transitional currency, redenominated 1,000 (old) to 1 (new) on 1 July 1994.
Kyrgyzstan decided to leave the ruble zone, because it considered the Russian monetary policy to be too inflationary; which was not good for stabilizing the economy. Kyrgyzstan introduced its own currency (the som) on 10 May 1993. The first issue consisted of banknotes of 0.01; 0.10; 0.50; 1; 5 and 20 Som. After a period of dual circulation the som became the only legal tender, on 15 May. New series of banknotes were introduced in 1994 and 1997. Starting in January 2008, low denomination banknotes were phased out and replaced by coins.
Latvia was the first country to introduce its own currency: the Latvian ruble, introduced May 7, 1992, on par with the Soviet ruble and circulated parallel with it; on July 20, it became the sole legal tender. It was the second country to leave the ruble zone entirely. Latvia decided to leave the ruble zone, because it considered the Russian monetary policy to be too inflationary; which was not good for stabilizing the economy. Latvia declared independence on 4 May 1990, this was, however, not formally recognized by the Soviet Union until 25 December 1991. On 3 September 1991 the Supreme Council of the Republic of Latvia passed a resolution to restore the status of the Bank of Latvia to that of a central bank, with the exclusive right to issue the national currency.
In the first four months of 1992 Latvia was adversely affected by the inflation of the ruble. In addition, the outgoing cash payments (with other ex-USSR states) surpassed the incoming money amounts by 122 million rubles (5.9%) in February and in April by 686 million rubles (29.2%), thus causing a very serious shortage of cash. Since money was issued by Russia, the Bank of Latvia was unable to improve the cash circulation in the country. The situation completely depended on the possibility of receiving or buying cash and credit resources from the Russian central bank. It was evident that a crisis could develop, in which the Bank of Latvia would not be able to execute even the most necessary payments.
Thus the Monetary Reform Committee of the Republic of Latvia was established, and on 4 May 1992 it passed the resolution on introducing a new temporary currency: the Latvian ruble. Notes were issued on 7 May in the following denominations: 1, 2, 5, 10, 20, 50, 200 and 500 rubles. They were exchanged at par with Soviet rubles. Until 20 July both currencies circulated together, at that day the Soviet ruble ceased to be legal tender and Latvia left the ruble zone entirely.
The Latvian ruble was however intended as a temporary currency. It was gradually replaced by the new national currency (the lats). This process started on 5 March 1993 with the introduction of the 5 lats-banknote and would be completed on 20 July 1998, with the 500 lats-banknote.
The successful reform ending in the introduction of the lats facilitated Latvia’s transition to a stable market economy.
Uzbekistan was "pushed out" of the Ruble zone as a consequence of the July 1993 introduction of new banknotes in Russia.
Uzbekistan introduced a temporary national currency (the som) on 15 November 1993. It replaced the ruble at a rate of 1:1. Between July and November 1993 old and new ruble notes circulated together. On 1 July 1994 the temporary som was replaced by a new, permanent, version of the som. Old notes were exchanged at a rate of 1.000 to 1. At its introduction 7 som were equal to 1 United States dollar.