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. Last Updated: 07/27/2016

No rubles? City uses commemorative coins

Despite attempts by the Russian government to solve the shortage of rubles, the cash crisis rages on throughout the country, forcing local authorities to scramble for ways to pay an increasingly petulant population.


The government has issued 5, 000-ruble notes and allowed debt-ridden, state-owned enterprises to start paying over 220 billion rubles in salaries owed to workers, many of whom have not had a payday in months. In addition, President Boris Yeltsin has embarked upon a policy of shuttle relief, flying to trouble spots around the country with sackfuls of rubles to placate disgruntled locals.


But the results of these measures have been mixed. Some state-owned factories have begun to pay salaries, but many more are telling workers they will have to continue to wait, as there is still no cash. Some factories have begun printing their own "money" for use by workers in factory cafeterias and stores. One large metal factory in Magnitogorsk has even begun designing its own credit card, the weekly Argumenty i Fakty reported.


The 5, 000-ruble bills have also had a limited positive effect. According to a report in the newspaper Izvestia, the city of Yaroslavl has received plenty of the 5, 000-ruble notes, but no one can exchange them for smaller denominations - except some enterprising citizens who are charging 300 rubles for the service.


But neither the 5, 000-ruble notes nor Yeltsin have arrived in St. Petersburg, so the local government has ordered a local mint to release an issue of 1991 commemorative coins for use as common currency.


Until recently, coin shops were the only places one could acquire the elegant coins, derisively referred to as "Pavlov's change" in reference to Valentin Pavlov, the discredited former prime minister and coup-plotter who commissioned them. Now they are legal tender in Russia's second largest city, and not everyone is happy about it.


Owners of some kiosks and commercial shops refuse to accept the coins, fearing they are surrogates that will become valueless as soon as the paper ruble shortage is resolved.


Another problem is that the coins, which were designed before inflation became a problem in Russia, come in puny 10-, 5- and 1-ruble denominations, forcing consumers to carry large, heavy quantities of change.


The circulation of the coins has prompted a spate of rumors about the real reasons behind their appearance. Some fear that the low-denomination coins are a sign that the ruble is to be devalued. Proponents of this idea point out that the coins, which are devoid of any obvious Soviet symbols other than the "U. S. S. R". emblazoned


on one side, are the prototype for the new Russian ruble.


Although government officials have repeatedly denied that plans for currency reform are underway, citizens of St. Petersburg, like most Russians, have developed a deep-seated mistrust of government.


Many citizens of the former Soviet Union lost their entire savings in the 1991 currency reform, in which the Pavlov government replaced 50-and 100-ruble notes with no advance warning.


To prepare for the eventuality of a similar reform, some St. Petersburg residents have begun buying as many of the coins as they can with their limited paper ruble supplies.