In 1961, the Soviet government conducted a monetary reform. The main reason was great public expenditures for the space programme and for supporting friendly countries: Egypt, India, and Cuba. Some experts believe that cheap crude oil made oil export unprofitable, and that was one of the reasons for this reform.
The main objective of the reform was to change the gold content of Russian Ruble. It was increased up to 0.987412 grams of pure gold. Before the reform, the US Dollar was equal to 4.00 Rubles, and after the reform, it became equal to 0.90 Rubles.
The government informed the people about the forthcoming reform. According to the official sources, it was modernization of the Soviet monetary system. They promised to strengthen the self-supporting capabilities of Soviet enterprises and to increase the purchasing power of Soviet Ruble. The reform was designed to support further development of the national economy.
Starting from January 1, 1961, the government changed the standard of prices, i.e., the value was expressed in different units. All the capital, internal sovereign debt, salaries, pensions, allowances, stipends, tariffs and prices were recalculated, and 10 old Rubles turned into 1 new Ruble. New banknotes appeared with denomination of 1, 3, 5, 10, 25, 50 and 100 Rubles, as well as new coins. The only remaining old coins were 1, 2 and 3 kopecks.
Money was replaced within three months: between January 1 and April 1, 1961. Exchange offices were established in cities and villages; however, some of them were frequently closed due to hard weather conditions. People most frequently asked government officials questions about the possibility of higher prices for TV sets, refrigerators, washers and cars, prices on farmers’ markets and about the mechanisms of government control over prices.
Experts have different opinions about the results of Khrushchev’s monetary reform. Some of them were positive: producing costs of money decreased due to smaller banknotes, prices for essential goods also went down, monetary transactions and settlements became easier. However, the reform had negative consequences as well, e.g., salaries went down and imported goods became more expensive quickly turning into luxury items. Prices in the state-owned stores indeed were decreased on a pro rata basis (ten times), but prices at the farmers’ markets went down only two times. Thus, the managers of the agricultural stores received great benefits from selling vegetables to profiteers who then sold them in the markets. As a result, groceries sold only poor quality goods, and people had to buy food in the markets at higher prices. This created a vicious circle.
According to Professor Nikolay Polyakov, the long-term consequences of the monetary reform for the Soviet economy were negative. However, the currency notes of 1961 for a long time remained the symbols of stability and high purchasing power of Soviet Rouble in both domestic and foreign markets.
The main objective of the reform was to change the gold content of Russian Ruble. It was increased up to 0.987412 grams of pure gold. Before the reform, the US Dollar was equal to 4.00 Rubles, and after the reform, it became equal to 0.90 Rubles.
The government informed the people about the forthcoming reform. According to the official sources, it was modernization of the Soviet monetary system. They promised to strengthen the self-supporting capabilities of Soviet enterprises and to increase the purchasing power of Soviet Ruble. The reform was designed to support further development of the national economy.
Starting from January 1, 1961, the government changed the standard of prices, i.e., the value was expressed in different units. All the capital, internal sovereign debt, salaries, pensions, allowances, stipends, tariffs and prices were recalculated, and 10 old Rubles turned into 1 new Ruble. New banknotes appeared with denomination of 1, 3, 5, 10, 25, 50 and 100 Rubles, as well as new coins. The only remaining old coins were 1, 2 and 3 kopecks.
Money was replaced within three months: between January 1 and April 1, 1961. Exchange offices were established in cities and villages; however, some of them were frequently closed due to hard weather conditions. People most frequently asked government officials questions about the possibility of higher prices for TV sets, refrigerators, washers and cars, prices on farmers’ markets and about the mechanisms of government control over prices.
Experts have different opinions about the results of Khrushchev’s monetary reform. Some of them were positive: producing costs of money decreased due to smaller banknotes, prices for essential goods also went down, monetary transactions and settlements became easier. However, the reform had negative consequences as well, e.g., salaries went down and imported goods became more expensive quickly turning into luxury items. Prices in the state-owned stores indeed were decreased on a pro rata basis (ten times), but prices at the farmers’ markets went down only two times. Thus, the managers of the agricultural stores received great benefits from selling vegetables to profiteers who then sold them in the markets. As a result, groceries sold only poor quality goods, and people had to buy food in the markets at higher prices. This created a vicious circle.
According to Professor Nikolay Polyakov, the long-term consequences of the monetary reform for the Soviet economy were negative. However, the currency notes of 1961 for a long time remained the symbols of stability and high purchasing power of Soviet Rouble in both domestic and foreign markets.
