Denomination is one of the economic terms that people fear like plague. After all, to put it in a simple way, denomination is the "cutting" of extra zeros from banknotes. That is, it was one hundred rubles, it became 10 or 1, depending on the scope of the problem. If we use professional terminology, denomination is a change in the face value of banknotes in order to stabilize the currency after hyperinflation and simplify calculations.
Rumors about the coming denomination in Russia have been circulating for several years already. After 1998, when all the savings of Russians dramatically depreciated, the majority of citizens are very much afraid of a repetition of the situation.
Inflation in 98 was like a bolt from the blue. No one expected her, and many kept their accumulated funds in rubles. But then a new trend emerged to convert savings into currency, which increased in price by at least 3 times.
What denomination threatens
Denomination is terrible, first of all, because all the accumulations of people, including national ones, are instantly burned up. The cost of the stabilization fund varies depending on the face value of the funds in force in the country. And this is a direct impact on the economy, the general standard of living of citizens, production, etc.
A special issue related to denomination is insurance. After all, everything was drawn up at the same price and tariffs, and began to be recalculated at new ones.
The denomination will directly affect those who have loans from Russian banks. Indeed, in fact, the cost will change very much. And how the bankers will count it (and there is always a loophole that they can turn out for themselves, not paying attention to the signed agreement) is unknown.
In addition, in the event of the denomination of the ruble and the strengthening of the dollar or euro, there will be rather big problems for those borrowers who took out loans in dollars or another currency. A sharp denomination can lead to the fact that the foreign currency loan will rise in price at least twice.
Naturally, the denomination will bring problems to everyone, because wages at work are unlikely to increase. The decrease in the denomination of the ruble may well be played by the heads of companies, as well as their owners.
In addition to financial problems, the denomination also brings a hundred psychological discomfort. So, you are already used to coming to the store and buying sausage for 200 rubles per kilogram. And now they say that it will cost about 20 rubles / kg. It will take a lot of time until everyone is rebuilt, until they get used to it.
Why denomination is used
Denomination itself is a technical procedure that should reduce the denomination of the national currency. It is required to simplify economic calculations and is usually used against the backdrop of high inflation.
They resort to denomination when no other measures are able to curb the rise in prices. Then they try to reduce the visibility of high costs, artificially turning them into small ones. After all, 10 rubles is not at all the same as 1000. True, this has absolutely no effect on improving production or agriculture.
