Denomination - what is it? Denomination in simple words. Currency reforms: essence, types and methods of implementation Monetary reform definition

Money. Credit. Banks [Answers to exam papers] Varlamova Tatyana Petrovna

44. Currency reforms as a way to radically change the monetary system

Monetary reforms were carried out under conditions of metallic money circulation - under the silver or gold standard, including after the Second World War, when the gold exchange, or gold dollar, standard was in effect.

After the end of wars and revolutions, the stabilization of monetary circulation as one of the most important ways to restore the economy was carried out using the following methods:

1) nullification;

2) restoration (revaluation);

3) devaluation;

4) denominations.

Nullification means the announcement of the cancellation of a heavily depreciated unit and the introduction of a new currency. The new mark was exchanged in a ratio of 1:1 trillion of the old Reichsmarks. The previous monetary unit was cancelled.

Restoration– restoration of the previous gold content of the monetary unit. For example, after the First World War during the monetary reform of 1925–1928. In England, the pre-war gold content of the pound sterling was restored. After World War II, restoration, or revaluation, was carried out by raising the official exchange rate to the dollar, and then the International Monetary Fund recorded an increase in the gold content of the currency. For example, Germany carried out three revaluations within the framework of the Bretton Woods monetary system (in 1961, 1969 and 1971). Germany also carried out repeated revaluations within the framework of the European monetary system, where the regime of fixed exchange rates was maintained.

Devaluation- a decrease in the gold content of the monetary unit, and after World War II - the official exchange rate to the US dollar and its gold content. Thus, as a result of two devaluations of the dollar, its gold content was reduced in December 1971 by 7.89%, and in February 1973 - by 10%. After

introduction of floating exchange rates in 1973, devaluation is carried out only in the group with regulated exchange rates - in the “European currency snake”, on the basis of which the European monetary system was created.

Denomination– the method of crossing out zeros, i.e. enlarging the price scale. In particular, in Brazil in 1988 a new monetary unit, the nocruzado, was introduced, equivalent to 1000 of the old devalued cruzados. In Russia, in 1998, the ruble was also redenominated in a ratio of 1: 1000 old rubles.

In conditions of a deep and structural crisis of the economy with high rates of hidden inflation, the state can pursue a policy of shock therapy, that is, a policy of abruptly abandoning control over prices for goods and services. In this case, inflation moves from hidden to open form.

Shock therapy methods were used in many countries after the Second World War, and they were accompanied by such anti-inflationary means as monetary reform, which was confiscatory nature.

According to the methods of implementation, these monetary reforms are divided into types such as:

1) exchange of paper money at a deflationary rate for new money in order to sharply reduce the supply of paper money. For example, in November 1944 in Greece the exchange was carried out in the ratio of 1 new drachma to 1 billion old;

2) temporary (full or partial) freezing of bank deposits of the population and entrepreneurs; similar reforms were carried out in France (June 1945 and January 1948), Belgium (October 1944), Austria (July and November 1945) and other countries;

3) a combination of the first and second methods of monetary reforms.

Despite the negative social consequences, shock therapy methods were widely used in international practice, sometimes being the only way to combat hidden inflation.

45. REASONS AND FEATURES OF THE APPEARANCE OF INFLATION IN RUSSIA

The emergence of inflation in Russia was due to the following reasons:

1) deep deformations and imbalances in social production;

2) structural distortions of the economy;

3) monopoly of producers of commercial products;

4) militarized economy;

5) a swollen state apparatus. The action of inflationary mechanisms in Russia was stimulated by government funding and preferential lending. The subsequent rise in prices for equipment, raw materials, fuel and wage increases coupled with a reduction in production led to the fact that demand inflation developed into another form - inflation of production costs. The mechanism of supply inflation is based on factors such as:

1) rising prices for intermediate goods, dictates of enterprises producing electricity and other energy resources;

2) underdeveloped market infrastructure (in particular, private investment instruments, capital flows, accumulation of household savings, which is especially typical for a transition economy);

3) imperfect competition in the market, its monopolization, the presence of barriers to competition in the form of a high level of product differentiation, legislative restrictions on the entry of “outside” structures into the industry (licensing);

4) underdevelopment of the labor market.

In the conditions of an underdeveloped market economy, devoid of market incentives, commodity-money relations begin to partially function according to the laws of a monopolized market, as was the case in Russia.

Specifics of inflation in Russia is that:

1) the growth and development of inflation occurred in conditions of commodity shortage against the backdrop of constantly emerging crises of non-payments;

2) inflation was accompanied by the presence of an unrealistic exchange rate, which was formed not by the market, but only by its consumer part;

3) investments were not made in the national economy due to the impossibility of forming a real exchange rate equally by the consumer market and the investment market (such as buildings, structures, land);

4) the investment sphere could not be formed, since commercial banks did not have real tax benefits associated with investing in the investment process.

Inflation causes complex socio-economic phenomena:

1) disruption of the monetary system and the creation of financial tension in the country, and ultimately – an increase in the cost of living;

2) naturalization of exchange processes, weakening of workers’ interest in the results of their labor;

3) real changes in the distribution of gross national product;

4) strengthening of social differentiation due to the fact that some people’s incomes remain the same, while others’ incomes increase, which ultimately affects the motivational mechanism;

5) low level of satisfaction of population demand due to worsening shortages;

6) money deposited in the hands of the population, savings banks and in the accounts of enterprises;

7) the danger of risk when investing funds in projects for the long term;

8) uneven growth in prices for goods and services due to uneven changes in income and investment dynamics;

9) changes not only in the level of prices and incomes, but also in their ratio, structure, and geography. Inflation makes doing business extremely risky.

In such an economic situation, the volume of investment (including foreign investment) falls, which reduces access to foreign know-how. At the same time, it becomes impossible to conduct international trade.

The value of people's savings decreases sharply because, as a rule, bank interest rates are too low to protect savings from inflation.

From the book Finance and Credit author Shevchuk Denis Alexandrovich

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From the book On Interest: Loan, Judicial, Reckless. “Monetary civilization” and the modern crisis author Katasonov Valentin Yurievich

Part 3 “Debt economy” as a way of existence of “monetary

author

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From the book Money, Credit, Banks. Cheat sheets author Obraztsova Lyudmila Nikolaevna

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From the book Money, Credit, Banks. Cheat sheets author Obraztsova Lyudmila Nikolaevna

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author Shevchuk Denis Alexandrovich

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From the book Money. Credit. Banks: lecture notes author Shevchuk Denis Alexandrovich

10. Elements of the country's monetary system (CMS) The structure of the CMS, its elements are determined and regulated by the legislation of the country. All systems are characterized by common features, regardless of the form of construction of the DSS. Elements of the DSS: the name of the monetary unit of the country serving

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From the book Finance: lecture notes author Kotelnikova Ekaterina

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From the book General Theory of Employment, Interest and Money author Keynes John Maynard

CHAPTER 19. Changes in Money Wages In some respects it would be better if the effect produced by changes in money wages were considered by us in one of the preceding chapters. After all, classical theory* is accustomed to associate the assumption of

by Fresco Jacques

From the book All the best that money can't buy. A world without politics, poverty and wars by Fresco Jacques Currency reform, its types (nullification, denomination, devaluation, revaluation). Anti-inflationary policy: deflationary policy, income policy.

Currency reform is a transformation of the monetary system carried out by the state with the aim of streamlining and strengthening the country's monetary circulation.

Radical monetary reforms associated with changes in the principles of organization of the monetary system, as a rule, are aimed at long-term stabilization of the monetary unit. Such reforms are usually preceded by measures related to the improvement of public finances and the creation of conditions for strengthening the country's economy.

Partial transformations of the monetary system eliminate certain negative phenomena in the monetary sphere for a short period of time.

Types of monetary reforms:

The following types of monetary reforms are known in the history of monetary circulation.

1. The transition from one monetary commodity to another (from copper money - to silver, from silver - to gold, or from bimetallism - to monometallism, then - to the gold bullion, gold exchange standard) or from one type of monetary system to another (from metal circulation - to the circulation of credit and paper money).

2. Replacement of defective and depreciated coins with full-fledged ones or irredeemable depreciated banknotes with change ones, or restoration of the exchange of paper money for gold or silver.

3. Partial measures to stabilize the monetary system (changes in the order of issue, security of banknotes, price scale, gold content or exchange rates).

4. Formation of a new monetary system in connection with the creation of new states, as well as the unification of the monetary systems of several countries.

Monetary reforms are carried out by various methods depending on the form of circulating money (money as a commodity - a universal equivalent or as signs of value - credit and paper money), the socio-economic structure of the country, complete or partial transformation of the monetary system, and state policy. Monetary reforms may be accompanied by the withdrawal from circulation of all or part of depreciated paper banknotes and their replacement with new money (paper or metal), a change in the gold content of money or its exchange rate, the order of issue, security, as well as currency regulation.

The most typical methods of stabilizing the monetary system are the following.

Nullification is the declaration by the state of depreciated old banknotes as invalid and the issuance of new paper banknotes in smaller quantities.

Nullification is usually carried out during a period of economic stabilization after hyperinflation to restore confidence in the national currency. This is carried out after the war when creating independent states and in developing countries. In developed countries, in modern conditions, due to strict regulation of monetary circulation and inflation control, nullification is not used, although Argentina in the late 80s and early 90s resorted to nullification almost every year.

Denomination (change in price scale) - a change in the face value of banknotes with their exchange at a certain ratio for new, larger monetary units with the simultaneous recalculation of all monetary obligations in the country (bank accounts, prices, tariffs, wages, etc.) .

The denomination also provides for the replacement of old banknotes with new ones, but without limiting the amounts. Formally, it is of a technical nature, since it facilitates and simplifies accounting, reduces circulation costs and does not affect the economic foundations of stabilizing money circulation. At the same time, it can be an important stage in strengthening the monetary system if it is carried out at the final stage of stabilizing the economy, finances and suppressing hyperinflation, since it is an important point in increasing confidence in the national currency.

Devaluation - under the gold standard, a decrease in the metallic content of the monetary unit, with the cessation of the exchange of credit money for gold - a decrease in the exchange rate of national banknotes in relation to foreign currency.

After the end of the exchange of credit money for gold, devaluation began to be used to strengthen the competitive positions of countries in foreign markets, improve the balance of payments, and attract foreign investment.

Devaluation does not eliminate the problem of monetary circulation and in modern conditions, it does not restore the stability of the national currency. Moreover, it leads to a decrease in the purchasing power of money as a result of rising prices for imported goods and promotes inflationary processes in the country. It stimulates the export of products and intensifies competition in the foreign market. Typically, devaluation is accompanied by differentiation of export and import duties, the introduction of currency and other protective clauses.

Revaluation (restoration) is an increase in the metal content of monetary units or the exchange rate of paper banknotes in relation to metal or foreign currency. With the abolition of the gold content of currencies in the mid-70s of the 20th century, revaluation began to mean only an increase in the market rate of the currency.

Revaluation restrains inflationary processes in the country, since imported goods become cheaper, but it is unprofitable for exporters, who lose on exchange rate differences when exchanging cheaper foreign currency for their own strengthened currency under previously concluded contracts.

Under monometallism, radical monetary reforms coincided with methods of stabilizing the monetary system (nullification, devaluation, revaluation) and were accompanied by the restoration of the exchange of paper money for metal or an increase in their gold content or a return to the gold or silver standard. In modern conditions, denomination and revaluation are used as methods of monetary and exchange rate policy. The requirement to carry out devaluation is established in a number of IMF stabilization programs offered to countries.

Restriction of the money supply is the most important element of this policy. This limitation is most clearly manifested in the establishment of limits on the annual growth of the money supply. The limit on monetary expansion is a barrier that limits any government activity, regardless of the state of the budget, the intensity of investment, the level of unemployment, etc.

Deflationary policy boils down to limiting money demand through the monetary and tax mechanisms. The peculiarity of deflationary policy is that it usually causes a short-term slowdown in economic growth.

Incomes policy as an anti-inflationary tactic emphasizes price and wage controls. This policy is used when inflation in a country is triggered by unreasonably high and rapidly growing production costs. The main goal of this policy is to achieve price stability. Among the anti-inflationary measures within the framework of this policy, the following are usually used:

1. Long-term and targeted state regulation of prices for individual (most important) goods and services, often produced under conditions of a monopoly or oligopoly. This regulation can be direct (in the USA until 1974, in the UK until 1979, in France until 1987) or indirect, i.e. through government procurement, loans, subsidies, production costing, avoidance of price fixing, quantitative restrictions on imports, export premiums and import duties.

2. Voluntary income regulation. Here the state directs its efforts to the successful completion of annual negotiations between workers and employers, i.e. to establish real limits for price and wage growth depending on the expected increase in labor productivity and the general state of the country’s economy.

Monetary system: concept, types of monetary system: metal circulation system (and its 2 subtypes) and paper-credit circulation system. Features of the modern paper-credit monetary system .

The monetary system is the structure of monetary circulation in the country, which has developed historically and is enshrined in national legislation. It was formed in the 16th - 17th centuries. with the emergence and establishment of capitalist production, as well as a centralized state and national market. As commodity-money relations and capitalist production developed, the monetary system underwent significant changes.

Depending on the type of money (money as a commodity that serves as a universal equivalent, or money as a sign of value), monetary systems are distinguished into two types:

a system of metal circulation, which is based on real money (silver, gold), performing all five functions, and circulating banknotes are freely exchanged for real money;

a system of paper-credit circulation in which real money is replaced by signs of value, and paper (treasury bills) or credit money are in circulation.

Under the metal monetary circulation system, two types of monetary systems are distinguished: bimetallism and monometallism, depending on how much metal is accepted as the universal equivalent and the base of monetary circulation.

1) Bimetallism is a monetary system in which the role of universal equivalent is assigned to two metals (silver and gold). The free minting of coins from two metals and their unlimited circulation were provided for. The market set two prices for one product. This system existed in the 16th - 18th centuries, and in a number of Western European countries it was in effect in the 20th century.

The presence of two metals as a universal equivalent came into conflict with the nature of money as a single commodity that measures the value of all goods. This system did not ensure the stability of monetary circulation, since changes in the value of one of the monetary metals led to fluctuations in prices for goods. The development of capitalism, requiring the stability of the monetary system, a single universal equivalent, led to the transition to monometallism.

2) Monometallism - a monetary system in which one metal (silver or gold) serves as the universal equivalent. With this system, there are coins made of one precious metal and tokens of value exchanged for coins. Silver monometallism existed in Russia (1843 - 1852), India (1852 - 1893), the Netherlands (1847 - 1875), China (until 1935).

Paper-credit (fiduciary) monetary systems are monetary systems in which banknotes are not representatives of social material wealth.

Such monetary systems were formed as a result of the demonetization of gold. There are three types of fiduciary monetary systems:

transitional (combine metal and paper circulation);

full fiduciary standard;

electronic-paper monetary systems.

Currently, most countries are transitioning to electronic-paper monetary systems. The characteristic features of such systems are as follows:

issuing money in the form of bank lending to economic entities and for the increase in official gold and foreign exchange reserves;

development of non-cash money circulation and reduction of cash;

monopolization of the issue of cash by the state represented by the issuing bank;

the prevailing development in the system of non-cash money circulation of electronic money payments:

based on multi-purpose prepaid cards (card-based systems) - based on cards with stored value, or “electronic wallets”;

based on “network money” (software-based / network-based systems) - the monetary value is stored in computer memory, and with the help of special software it is transferred via electronic communication networks (electronic payment systems of issuing banks, payments on the Internet);

the increasing role of state regulation of monetary circulation.

The functioning of modern monetary systems is based on a number of principles, which include:

centralized management of the national monetary system;

forecast planning of cash flow;

stability and elasticity of money turnover;

credit nature of money issue;

the security of banknotes issued for circulation with the assets of the issuing bank;

independence of the issuing bank from the government and its accountability to parliament;

providing the government with funds only through lending;

comprehensive use of monetary regulation instruments.

Based on these principles, elements of national monetary systems are formed. The supply of money in the economy is realized by the country's bank of issue, which issues cash, and by the system of commercial banks, which “create” non-cash money. The size of the money supply depends on the main priorities of economic policy.

Elements of the monetary system: monetary units, price scale, emission mechanism, structure of the money supply in circulation, mechanism of monetary regulation, the procedure for forecast planning, the procedure for establishing the exchange rate, the procedure for cash discipline.

Modern monetary systems are a system within which individual elements are in a certain unity. The elements of the monetary system are:

· name of the monetary unit;

· principles of organization of the monetary system;

· price scale;

· types and procedure for securing banknotes;

· emission mechanism;

· structure of money supply;

· procedure for forecasting and planning cash flow;

· mechanism of monetary regulation;

· procedure for establishing the exchange rate;

· cash discipline procedure.

A monetary unit is a monetary sign established by law, which serves to measure and express the prices of all economic assets (except for money itself).

As a rule, it is divided into small multiples. All banknotes issued exclusively by the central bank are legal tender. Legal tender are banknotes that are required by law to be accepted in repayment of debt in the territory of a given state. All legal tender is money, but not all money is legal tender. Foreign currency is not considered legal tender. Individual subjects of economic relations may be ready to accept various banknotes in payment of the debt due, but only banknotes that they are required to accept in payment by law are called legal tender.

· the principle of centralized management of the monetary system. In market conditions, centralized management of the monetary system is based primarily on economic methods based on the motivation of the activities of business entities;

the principle of planning cash flow in market conditions based on drawing up appropriate forecasts;

· the principle of stability and elasticity of money turnover: the monetary system must satisfy the economy’s needs for funds, but not allow the development of inflationary processes;

· the principle of the credit nature of money issue means that the issue of cash and non-cash money is carried out on the basis of credit transactions;

· the principle of security of issued money;

· the principle of independence of the central bank from the state in the field of issuing operations, in solving the problem of ensuring the stability of the national monetary unit, the integrated use of monetary regulation instruments, and the provision of funds to the government through lending;

· the principle of supervision and control over money circulation: the state, through the banking, financial system, and tax authorities, must ensure constant supervision and control over money circulation and the main cash flows in the economy.

The state ensures constant control over cash turnover and its elements: the proportions between the volumes of cash and non-cash turnover.

Only the national currency is allowed to operate on the territory of the state. The population can freely exchange national currency for the currencies of other countries, but the use of the currency received in the exchange is allowed only for payments abroad.

An important principle is the mandatory implementation of cash discipline. The procedure for cash discipline reflects a set of general rules, forms of primary cash documents, reporting forms that should guide enterprises, organizations and institutions of all forms of ownership when organizing cash flow passing through their cash registers. Control over compliance with cash discipline is assigned to commercial banks. As the monetary system develops and improves, various forms of non-cash payments occupy an increasing place in it, which makes it more transparent for control, flexible, and saves time and material costs.

The state also determines the procedure for establishing the exchange rate of the national currency in relation to foreign currencies.

An important element of the monetary system is the procedure for issuing credit and paper money irredeemable for gold. The emission mechanism is the procedure for issuing cash and non-cash money into circulation and withdrawing it.

Currently, the issue of banknotes that are not redeemable for gold is monopolized by the state. Regardless of the type of banknotes, they are issued by issuing banks, which organize money circulation in the country and are responsible for its condition. This blurs the lines between credit and paper money, which are legal tender in the country's domestic market, and some of the currencies are even in the foreign market (convertible currencies). Both appear in the form of bank notes. The issue of bank notes is carried out by the country's issuing bank in the process of lending to commercial banks, the state, and operations related to the purchase of foreign currency and government securities. As a result, there is an increase in the money supply due to an increase in the balance of both cash and payment or potentially possible means of payment in the field of non-cash payments.

In economically developed countries, more than 90% of money turnover is carried out in the form of non-cash payments. Therefore, the increase in the money supply in circulation occurs mainly not due to the issue of banknotes (cash), but due to the issue of deposit checks. The issue of banknotes is associated with cash services for the national economy - commercial banks, the state budget, public debt, etc., when it is necessary to increase the cash reserve of cash.

Deposit-check emission is carried out in the process of lending by the issuing bank to commercial banks. In each specific period, the credit relations of the issuing bank with commercial banks are determined by its monetary policy aimed at strengthening money circulation in the country. As a result, there is an increase or decrease in credit investments in the national economy.

An increase in credit investments involves the issuance of deposits and checks, which leads to an increase in the money supply both through an increase in balances in the accounts of clients of commercial banks and through cash in circulation. Deposit check issuance is carried out by recording the amount of the loan provided to correspondent accounts of commercial banks and state budget accounts in the central bank. Since the issuance of a loan in this case is not associated with the preliminary formation of resources, by its nature this is nothing more than the opening of an imaginary deposit, on the basis of which some monetary aggregates will subsequently increase - M1, M2, M3, etc.

The size of the money supply is also affected by the operations of commercial banks. Firstly, the amount of the loan issued and credited to the client’s account increases the money supply M2. Secondly, an increase in balances on clients' settlement and current accounts increases the credit resources of a commercial bank, thus predetermining the further growth of credit investments. Thirdly, bank bills and certificates of deposit issued by commercial banks can be used as means of payment, which means an increase in the money supply in circulation.

By defining the elements of the monetary system, the state legislatively provides for economic instruments for regulating the money supply in circulation.

The monetary regulation mechanism is a set of monetary regulation instruments (direct and indirect), the rights and responsibilities of monetary regulation authorities.

The Central Bank, as the country's emission center, constantly studies the state of monetary circulation and improves its organization. It has a whole system of economic and administrative measures to regulate the money supply in circulation.

The most common measures of economic regulation of money circulation include:

· discount rate policy, i.e. regulation of interest rates on loans provided by the central bank to commercial banks;

· open market operations related to the purchase and sale of government and other securities;

· change in the required reserve ratio of commercial banks at the central bank.

The amount of credit resources of commercial banks, and therefore the volume of credit investments, is affected by such a measure of the central bank as a change in the required reserve ratio of commercial banks at the central bank. According to Western economists, this measure is a “crude” tool for regulating the money supply in circulation. In the United States, the practice of required reserves was introduced back in 1923. Until 1933, the norm of required reserves of commercial banks in the Federal Reserve System was not revised. Therefore, this measure did not play a role in monetary regulation. Its purpose was to create an insurance reserve to pay deposits to clients of commercial banks in the event of their bankruptcy. In 1933, there was a sharp increase in excess reserves in the US banking system, which could lead to an inflationary explosion. In this regard, a decision was made on the possibility of changing the mandatory reserve norms. Minimum reserves began to perform two functions:

· formation of an insurance reserve;

· monetary regulation of the money supply in circulation.

The desire of commercial banks to increase their income forces them to follow the path of multiplicative growth of liabilities and the issuance of their own means of payment. Therefore, the attempts of the central bank to influence the size of the money supply by changing the required reserve ratio often do not achieve their goal.

The procedure for establishing the exchange rate. The exchange rate is determined based on the quotation. Currency quotation allows you to determine the ratio of two monetary units offered for exchange. This ratio cannot be constant, because supply and demand changes in the foreign exchange market. Quotations are carried out by central (national) banks and the largest commercial banks. There are official and free (market) currency quotes.

Currently, the most commonly used quotation method is based on a “basket of currencies”, in which the national currency is compared with a number of other national currencies included in the “basket”.

The procedure for cash discipline is a set of general rules, forms of primary cash documents, and reporting forms that business entities must follow when organizing cash turnover passing through their cash registers.

Revaluation (restoration) — recovery former gold content of the monetary unit or increasing the solvency of the national currency.

Revaluation limits the influx of foreign speculative capital into the country and makes it possible to restrain the increase in the money supply in circulation and slow down the growth of domestic prices.

For example, after the First World War during the monetary reform of 1925-1928. In England, the pre-war gold content of the pound sterling was restored. After World War II, revaluation was carried out by increasing the official exchange rate to the dollar, and then registering an increase in the gold content of the monetary unit.

Devaluation

Devaluation- official decrease in the gold content of the monetary unit or its exchange rate (decrease in the purchasing power of the national monetary unit in relation to foreign currency).

Devaluation officially consolidates the actual depreciation of paper money that has already occurred in conditions of inflation. In 1998, the foreign economic imbalance was eliminated, the level of domestic prices in the country was reduced compared to world prices and the economy was made more competitive, and the level was reduced.

Devaluation is the depreciation of the national currency in relation to the foreign one. The terminology used to characterize changes in the monetary unit does not always sufficiently correctly assess the content of such measures. For example, denomination, as a rule, means a reduction in the nominal value of the issued banknotes. Such an assessment is practically acceptable for characterizing the denominations carried out in our country. This applies to the denomination of 1922, when the ruble issued in 1922 replaced 1000 previously issued banknotes, as well as in 1923, when newly issued notes were related to the notes of the 1922 model as 1: 100.

Subsequently, in 1961, the previously issued monetary units were replaced in a ratio of 10: 1 to the 1961 unit. This measure was a denomination, which amounted to a change in the nominal expression of the monetary unit, which was important mainly for monetary circulation within the country. However, simultaneously with the denomination, the gold content of the monetary unit was reduced by 4.5 times. It could not be characterized as a denomination, but represented an independent measure that was related mainly to transactions with foreign countries.

The name of the denomination is not given quite accurately in the Decree of the President of the Russian Federation of August 4, 1997 “On changes in the nominal value of Russian banknotes and the scale of prices.” Denomination is a method of “crossing out zeros”, i.e. consolidation of the price scale. In Russia, in 1998, the ruble was redenominated in a ratio of 1: 1000 old rubles. In accordance with the Decree, the denomination of the nominal value of banknotes, and not the monetary unit, was provided for, while the denomination applies not only to cash banknotes, but also to non-cash money.

Denomination

Denomination- strengthening by the state of its monetary unit, reducing the nominal value of banknotes (crossing out zeros - enlarging the scale of prices by crossing out zeros).

Denomination is used to streamline money circulation and simplify payments. In this case, old issues of banknotes are exchanged for new issues of paper money, expressed in larger units of account.

In Russia, on August 17, 1998, the ruble was devalued almost fourfold, namely, instead of the exchange rate of 6.1 rubles. for 1 US dollar a new rate of 24 rubles was established. per US dollar. During the financial crisis of 2009, the gradual depreciation of the ruble led to the fact that 1 US dollar costs 36.7 rubles. It must be taken into account that changes and, above all, the depreciation of the ruble are accompanied by a number of consequences, including:

increased interest in increasing exports, since per unit of foreign exchange earnings you can get a large amount in rubles;
rising prices on the domestic market, especially for imported goods, which may affect the deterioration of the financial situation of the population;
a decrease in the value of ruble savings (cash and money stored in banks);
worsening conditions for importing equipment.

All this should serve as an incentive for the state to implement certain measures to eliminate the negative consequences of the decline for both enterprises and the population.

Currency reforms in Russia

production growth, which helps to increase the volume of supply of goods and limits the possibility of price increases, which is of paramount importance for maintaining the stability of the monetary unit;
zero budget deficit, which makes it possible to avoid the use of money emission and borrowing to cover budget expenses, thereby limiting effective demand and its possible impact on price growth;
availability of sufficient gold and foreign exchange reserves allowing to maintain the stability of the national currency exchange rate, and, if necessary, to use such reserves for the import of goods, to increase their supply on the market.

The importance of each of these factors when carrying out various monetary reforms is not the same; only if all these prerequisites are present, reforms can be successful. Thus, during the Witte reform in Russia in 1895-1897. there were the necessary prerequisites in the form of production growth and a virtually deficit-free budget. However, since this reform provided for a transition to the free exchange of banknotes for gold, the accumulation of sufficient gold reserves acquired particular importance. To solve this problem, the slogan “We won’t eat it, we’ll take it out” was proclaimed, which made it possible, thanks to an increase in exports, to accumulate the necessary gold reserves and successfully complete the monetary reform.

Currency reform 1922-1924

The next monetary reform in our country was carried out in 1922-1924. and had the goal of eliminating the negative consequences of the First World War and the Civil War in the monetary sphere and, in particular, removing a rapidly depreciating monetary unit from circulation.

Despite the absence of the necessary prerequisites for the implementation of monetary reform, conditions arose that required its speedy implementation. They consisted in the fact that foreign currency began to function in circulation to an increasing extent, displacing the rapidly depreciating banknotes that were used. Therefore, the reform was launched towards the end of 1922 in the form of the issue of chervonets. However, due to the lack of necessary conditions, the reform was not completed immediately, but only at the beginning of 1924.

It was important that by this time there had been an increase in production, especially agricultural, and the state had at its disposal relatively sufficient gold and foreign exchange reserves. At the same time, there was a significant budget deficit, to cover which the issue of banknotes was used. Overcoming the budget deficit dragged on until the beginning of 1924, which determined the duration of the reform.

Currency reform of 1947

The next monetary reform in our country was carried out in 1947. It was aimed at eliminating the consequences of the war of 1941 - 1945. in the sphere of monetary circulation, in which there was an excessive amount of money; normalize the money supply; create a stable monetary unit, especially since the country maintained a card system for the distribution of products, in which products were sold at reduced prices, and there was commercial trade without the use of standardized distribution, where goods were sold at inflated prices. Therefore, the reform included not only the use of a new monetary unit, but also the abolition of the card system, rationed distribution of products and the transition to trade at uniform prices.

By this time, the country had the appropriate prerequisites for reform, including an increase in production volume, budget revenues and expenses were practically balanced, and there was a sufficient gold and foreign exchange reserve. Nevertheless, the originally planned reform in 1946 was postponed to 1947 due to the 1946 harvest failure; the good harvest of 1947 contributed to the reform.

Currency reform of 1961

In 1960, a decision was made to change the price scale again and increase the gold content of the ruble from 0.222168 g of pure gold in 1950 to 0.987412 g of pure gold in 1961, i.e. more than four times.

The change in the price scale from January 1, 1961 was that all funds, internal debt, cash income of the population, prices and tariffs were recalculated in the ratio of 10 old rubles to 1 new ruble. USSR State Bank tickets were issued in denominations of 100, 50, 25 and 10 rubles. and treasury notes 5, 3 and 1 rub. New coins came into circulation: 1 ruble, 50, 20, 15 and 10 kopecks. from msdnonixel alloy and 5, 3, 2 and 1 kopecks. made of brass. The money exchange was carried out over three months: from January 1 to April 1, 1961.

In 1991 - 1993 In connection with political and inflationary processes and the collapse of the USSR, 50- and 100-ruble banknotes of the USSR were first replaced. Officially, the need for this reform was explained by several reasons:

in the former republics of the USSR there were a lot of savings in Soviet money, and these savings could increase inflation in Russia;
There were many counterfeit large denomination banknotes in circulation in the country;
it was necessary to seize illegal capital, which was stored in large bills.

After this reform, government-set prices increased. On January 1, 1992, coupons were abolished and prices were declared free. After this, prices and inflation began to rise rapidly.

At the first stage, the Central Bank of the Russian Federation carried out several successive issues of banknotes of higher and higher denominations. In 1992, the first banknotes of the Central Bank of the Russian Federation in 5,000 and 10,000 rubles appeared in circulation, in 1993 - a new series of banknotes in denominations of 100, 200, 500, 1,000, 5,000, 10,000 and 50,000 rubles. Since July 24, 1993, all bank and treasury notes of the USSR issued in 1961 - 1992 and notes of the Central Bank of the Russian Federation in 5,000 and 10,000 rubles. 1992 model withdrawn from circulation on the territory of the Russian Federation. In 1994, mainly in order to protect them from counterfeiting, modified banknotes of the Central Bank of the Russian Federation were issued in 5,000, 10,000 and 50,000 rubles. sample 1993, but on paper of a different color for each denomination and with a changed watermark and improved printing.

In 1997, a decision was made to enlarge the monetary unit, i.e. denominations of the ruble. This was due to the fact that there was a slight increase in the country's gross national product, and inflation was almost close to normal.

The 1998 reform consisted of enlarging the ruble by 1000 times, and unlike previous reforms, there were no strict restrictions on the timing and amount of money exchange. Denominated and non-denominated (“new” and “old”) money were in circulation simultaneously throughout 1998.

The experience of monetary reforms in Russia confirms that the required prerequisites for their implementation are production growth, a deficit-free budget, and the presence of gold and foreign exchange reserves, although each of the reforms carried out had its own characteristics. The general requirements for carrying out reforms remain important.

Changes in the elements of the monetary system are associated with monetary reforms.

Currency reform is a transformation of the monetary system carried out by the state with the aim of streamlining and strengthening the country’s monetary circulation.

Radical monetary reforms, associated with changes in the principles of organization of the monetary system, as a rule, are focused on long-term stabilization of the monetary unit. Such reforms are usually preceded by measures related to the improvement of public finances and the creation of conditions for strengthening the country's economy.

Partial transformations of the monetary system eliminate for a short period of time certain negative phenomena in the monetary sphere.

After the abandonment of the gold standard and the widespread transition of countries to banknotes and treasury bills that were not redeemable for gold, which were subject to chronic depreciation, monetary reforms could not ensure long-term stabilization of monetary systems. With the help of monetary reform, it is possible to achieve only temporary and partial ordering of some elements of the monetary system.

In modern conditions in developed countries, monetary reforms are being replaced by anti-inflationary programs as part of various stabilization plans and the implementation of monetary policy by central banks.

The following are known in the history of monetary circulation: types of monetary reforms.

2. Replacement of defective and depreciated coins with full-fledged ones or irredeemable depreciated banknotes with change ones, or restoration of the exchange of paper money for gold or silver.

3. Partial measures to stabilize the monetary system (changes in the order of issue, security of banknotes, price scale, gold content or exchange rates).

4. Formation of a new monetary system in connection with the creation of new states, as well as the unification of the monetary systems of several countries.

Monetary reforms are carried out using different methods depending on forms of circulating money (money as a commodity - a universal equivalent or as signs of value - credit and paper money), the socio-economic structure of the country, complete or partial transformation of the monetary system, state policy. Currency reforms may be accompanied the withdrawal from circulation of all or part of depreciated paper banknotes and their replacement with new money (paper or metal), a change in the gold content of money or its exchange rate, the order of issue, collateral, as well as currency regulation.

The most typical methods of stabilizing the monetary system are the following.

Nullification - declaring the depreciated old banknotes invalid by the state and issuing new paper banknotes in smaller quantities.

Nullification is usually carried out during a period of economic stabilization after hyperinflation to restore confidence in the national currency. This is carried out after the war during the creation of independent states and in developing countries. In developed countries, in modern conditions, due to strict regulation of monetary circulation and inflation control, nullification is not used, although Argentina in the late 80s and early 90s resorted to nullification almost every year.

Denomination (change in price scale) - a change in the face value of banknotes with their exchange at a certain ratio for new, larger monetary units with the simultaneous recalculation of all monetary obligations in the country (bank accounts, prices, tariffs, wages, etc. ).

The denomination also provides for the replacement of old banknotes with new ones, but no limit on amounts. Formally, it is of a technical nature, since it facilitates and simplifies accounting, reduces circulation costs and does not affect the economic foundations of stabilizing money circulation. At the same time, it can be an important stage in strengthening the monetary system if it is carried out at the final stage of stabilizing the economy, finances and suppressing hyperinflation, since it is an important point in increasing confidence in the national currency.

Devaluation - under the gold standard, a decrease in the metal content of the monetary unit, with the cessation of the exchange of credit money for gold - a decrease in the exchange rate of national banknotes in relation to foreign currency.

After the cessation of the exchange of credit money for gold, devaluation began to be used to strengthen the competitive positions of countries in foreign markets, improve the balance of payments, and attract foreign investment.

Devaluation does not eliminate the problem of monetary circulation in modern conditions, does not restore the stability of the national currency. Moreover, it leads to a decrease in the purchasing power of money as a result of rising prices for imported goods and promotes inflationary processes in the country.

It stimulates the export of products and intensifies competition in the foreign market. Typically, devaluation is accompanied by differentiation of export and import duties, the introduction of currency and other protective clauses.

Revaluation (restoration) - an increase in the metal content of monetary units or the exchange rate of paper banknotes in relation to metal or foreign currency. With the abolition of the gold content of currencies in the mid-70s of the 20th century, revaluation began to mean only an increase in the market rate of the currency.

Revaluation restrains inflation processes in the country, since imported goods become cheaper, but it is unprofitable for exporters, who lose on exchange rate differences when exchanging cheaper foreign currency for their own strengthened currency under previously concluded contracts.

In modern conditions denomination and revaluation are used as methods of monetary and exchange rate policy. The requirement to carry out devaluation is established in a number of IMF stabilization programs offered to countries.

From time to time you can hear rumors among people about a possible denomination. At the same time, some believe that during this period it is profitable to take loans in national currency, others watch the economy with fear, not rejoicing in the future. So, is denomination good or bad? What processes in the economy can we talk about if the need for denomination arises?

Where does denomination come from?

Denomination is inextricably linked with the concept of inflation. The latter is typical for every state to one degree or another. The lower the inflation rate, the more reasonably we can talk about the stability of the state’s economic system.

Inflation is an increase in the price level caused by the excess of demand for a product over supply. Insufficient production volumes necessitate higher prices for goods to cover production costs. The ideal inflation rate is considered to be 3-5%, but such figures are not often encountered. With a price increase of 20%, there is a need for monetary reforms.

Currency reforms

Each country has a certain amount of funds. When prices rise, there is a shortage of national currency, that is, the total volume of prices exceeds the volume of currency, which necessitates its additional issue.

Since each monetary unit is backed by gold, the additional issue of monetary units causes their depreciation.

In connection with the increase in prices, banknotes with a higher denomination are issued, that is, in simple terms, an increase in the digit of the banknote, or the addition of zeros. Over time, there is a need to carry out monetary reforms designed to increase the value of the country's currency.

In order to strengthen the monetary system, they resort to changing the national currency, the gold equivalent of paper money, the monetary system, and issuing new money.

Reforms include nullification, restoration, devaluation and redenomination.

Devaluation and redenomination

Devaluation involves the process of cheapening a monetary unit, that is, reducing the gold equivalent of a banknote. This causes an increase in the export price of goods, but at the same time it also increases the prices of foreign goods. Also, when talking about devaluation, they say that the national currency has become cheaper compared to the foreign currency.

Currency denomination is a change in the nominal value of banknotes (reduction), which occurs in a certain ratio. In the history of almost every state there has been a denomination, and often more than one. Thanks to this process, payments for goods become more convenient. How to answer the question: “Denomination - what is it?” in simple words? This is a reduction of zeros in the denomination of banknotes. So, 100,000 becomes 10,000, 1,000, etc. This reduces the volume of banknotes in the country, which simplifies the system of payments for goods and services.

Some sources report that denomination is a monetary reform, the types of which are all three listed above.

Ruble denomination

In the history of Russia (USSR) there were 4 instances of denomination: in 1947, 1961, 1991 and 1997-1998. In 2007-2008, there were rumors about a possible denomination, but it never happened. In the Russian Federation, denomination is usually carried out after a period of crisis and occurs by Decree of the President of the Russian Federation.

So, ruble denomination - what is it and does it have its own characteristics compared to other countries? Remembering previous episodes of denomination, people say that thanks to it, at one time it was possible to pay off the cost of real estate or repay a loan in a short period of time. So is denomination bad in the Russian economy or not?

The most appropriate in the conditions of the Russian economy is to reduce the denomination of the ruble by 1000 times. Denomination is a procedure that makes the national currency heavier. Thus, if the denomination of banknotes is reduced to less than 1,000, the denomination will be less effective, and with a denomination of 10,000, the ruble would be comparable in weight to the British pound, which is considered a fairly heavy currency. In this case, by reducing the zeros, prices would be rounded, which would increase the cost of goods, given the increase in the value of money itself.

Denomination, in principle, is beneficial for the state. Despite the fact that issuing new money is a significant expense for the state, it allows them to develop new degrees of protection. This protects banknotes from counterfeiting.

When exchanging old banknotes for new ones, both those and other money remain valid. In this case, the exchange can occur both when contacting a bank, and directly during payments in stores, at the discretion of the country’s leadership.

Forecasts for denomination in Russia

Today, holding a denomination in Russia is unlikely. As analysts say, today's banknotes do not have an extra number of zeros, which would necessitate this. Even in a crisis today, it is more appropriate for the Russian economy to use other methods of stabilizing the monetary unit.

In addition, redenomination is a monetary reform, which usually causes an increase in the level of inflation, and significant funds are needed to carry out redenomination, so the country’s leadership will not agree to this.

There is also no need to talk about the benefits of denomination for the population, because when denomination is carried out, both prices decrease, for example, by 100 times, and income decreases.

There are conditions under which there are prerequisites for the successful implementation of a denomination. These include the presence of production growth, that is, providing the state with the necessary volume of a particular product in order to prevent a supply shortage. Positive prerequisites also include the absence of the need to issue money, that is, additional issue of banknotes, as well as the presence of a gold and foreign exchange reserve that provides support for the national currency. In each specific case, the purpose of the upcoming reform matters.

Consequences of denomination

Such a monetary reform cannot occur without consequences for the economy.

These consequences are:

Increase in export volume, which allows you to get more national currency or goods per unit of foreign currency.
Rising prices for foreign goods, which is the downside of export growth.
The emergence of difficulty in storing savings in national currency due to their withdrawal from circulation. This applies to both money stored at home and savings in the bank.
Problems arising with the import of equipment.
Increase in the cost of loans in foreign currency(it can grow several times).

Denomination and religion

Denomination is not only an enlargement of a banknote, but also a specific term related to religion. Denomination in religion is a concept that has several meanings. In the first meaning, it is synonymous with the concept of “confession,” which is clear to the majority (a feature of religion within a certain religious teaching).

According to the second meaning, it is a religious community that has an intermediate position between a sect and a church.

Previously, a denomination was a name for religious movements that were just beginning to develop (the term appeared in the era of the Reformation).

Features of a religious denomination

Speaking about a denomination in the context of an association that combines the features of a church and a sect, it is necessary to have an idea of what exactly the denomination borrowed from both.

A sect usually recognizes only the faith that it professes, denying all others. The denomination is religiously tolerant, recognizing other religions and beliefs, which unites it with the church. In addition, the denomination borrowed hierarchy and its open type in relation to the outside world from the church. It recognizes the possibility of soul salvation if a person has sufficient faith.

At the same time, this confession has existed for a relatively short time, just like sects. She is also connected with the sect by active religious activity, opposing herself to the church.

In the structure of a religious denomination, a vertical system of subordination and a horizontal system of distribution of responsibilities are distinguished.

There is some inconsistency in the fact that the denomination recognizes the equality of all its members, and at the same time, within it there is a division into the elite and ordinary members of the community. The elite has broad powers and opportunities.