Here is the Moscow Times’ take (from yesterday’s paper) on the introduction of the 5000-ruble banknote. It makes a couple of the points that I've seen before in one form or another, but it also gives a higher figure for the average Russian salary than was implied in an article from which I quoted in an earlier post.
5,000 Ruble Bill to Soak Up Cash
Moscow Times, August 11, 2005. Issue 3228. Page 1.
By Anna Smolchenko
The Central Bank said Wednesday it would introduce a new 5,000 ruble note in 2006, in a move to help soak up the increasing amount of cash circulating in the expanding Russian economy. […]
The need for the note stems from large cash turnover and the rise of average salaries in Russia, the Central Bank said in a statement.
With a value of around $170 at current exchange rates, the new bill has a higher value than the largest bill in the United States, reflecting the large amount of business done in cash transactions in Russia. Most Russians remain wary of banks and are renowned for using cash to pay for everything from apartments to cars.
For those bigger transactions, the new note will offer convenience, some experts say. For the average consumer or tourist, however, it could make the retail experience more difficult, as the 1,000 ruble bill can already be hard to break in many shops, others said.
"They are making it easier for themselves," said Vladimir Tikhomirov, an economist at UralSib bank. It will now be easier and cheaper for the Central Bank to deliver cash to Russia's oil-rich regions, where salaries are relatively high, he said. "Stashing money under mattresses" will also be easier, he said, referring to the average Russian's preferred method of saving.
The average monthly salary as of June was just under 9,000 rubles, according to the State Statistics Service, more than three times higher than five years ago. […]
The introduction of the new note is not expected to have any inflationary or other economic impact. "It's a wholly psychological thing for a country where everything is done in cash," said Richard Hainsworth, CEO of RusRating, a bank rating agency. […]
1 comment:
Too right it would be hard to break a 5,000 ruble note in shops. I used to have trouble in Irkutsk breaking 100 rouble notes, let alone the 500s that the cash machine used to give me.
The lady at the local bread kiosk in Irkutsk even used to give me funny looks when I tried to buy my six ruble loaf of bread with a 10 ruble note...
There's a real obsession, I've noticed, in a lot of Eastern European countries about giving change. They really really really like you to give the exact change and, if you don't have it, there's always the chance that the person on the checkout will throw a major hissy fit. I'm never quite sure if it has to do with a scarcity of cash at many points in their history, or whether it's just a peculiar local custom that I never figured out.
Post a Comment