In a victory over inflation, Russia returns to the kopeck

January 02, 1998|By LOS ANGELES TIMES

MOSCOW -- Long gone but not forgotten, the humble kopeck returned to Russia on New Year's Day to cheer a population distressed by mind-boggling bank notes that made a loaf of bread seem staggeringly expensive.

The welcome return of the denomination that is one-hundredth of a ruble is part of the Russian currency reform that, as of yesterday, lops three zeros off the inflation-battered ruble.

The gradual exchange of old notes for new ones also serves as a government declaration of victory over inflation, which fell to a modest 11 percent in 1997 after reaching annual four-digit levels in 1992-1994. New bank notes and coins will circulate with the old for the rest of this year, and prices likewise will be posted throughout 1998 in old and new rubles.

The new currency system has been two years in the making, and a government-funded public relations blitz after President Boris N. Yeltsin's announcement of the change in August appears to have smoothed over most worries that buying power or bank savings would be depleted.

Introduction of the system at the start of a four-day holiday weekend has headed off panic. Banks are closed until Monday and few, if any, of the open stores had been supplied with new rubles ahead of the change.

As inflation caused by the government's reckless printing of money in the early 1990s ravaged the Russian currency, the state mint introduced larger and larger ruble denominations. The biggest old note in circulation is the 500,000 ruble bill, worth about $84.

"It is like going back to a time when I was young and enjoyed the sound of kopecks tinkling in my purse," said 83-year-old pensioner Mariya Basheva. "Then, to have a whole ruble made you feel rich."

Pub Date: 1/02/98

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.