New notes will appear to the far East and Sebastopol

The head of Sberbank German Gref photographed with the specimen banknote 200 rubles at the forum “Sochi 2016”, 30 September 2016

The Bank of Russia has summed up the results of the national contest to select symbols of the new banknotes in denomination of 200 and 2000 rubles, defeated the far East and Sevastopol, according to the results of voting in the TV channel “Russia 1”.

The Russians first chose the characters that will be depicted on the new banknotes. The design of banknotes is approved later by the Bank of Russia. In the address, they will appear only by the end of 2017. It will be the first new banknotes, putting into circulation, for 10 years. The issue of banknotes of new denominations should not affect the volume of cash in circulation and accelerate inflation, say experts interviewed by RBC.

The final results were announced the evening of 7 October. During television
The head of the Central Bank Elvira Nabiullina came out with a direct connection twice. The first time she said that the vote was attended by over three million people. The second time she recalled that which of the selected characters will be placed on the banknote 200 rubles., and what is on the banknote of 2000 RUB will be determined in the course of the Board of Directors of the Central Bank. However, Nabiullina still gave hope to fans of the band “Mumiy Troll”. “The decision of what cities will be on what the bill will be taken by the Board of Directors of the Bank of Russia. We all remember the song, “Vladivostok-2000”, – said Nabiullina.

The Bank of Russia announced the upcoming release of the new banknotes in denomination of 200 and 2000 rubles in April 2016. The head of the Central Bank Elvira Nabiullina then said that the banknotes of the other denominations especially to be withdrawn from circulation will not. The amount of money will be supported due to the withdrawal of old notes, she said. According to Nabiullina, the new banknote denominations will make cash payments more convenient, allowing people to save time when paying for goods and services.

“The coinage of intermediate values, which include banknotes in 200 and 2000 rubles., the cost is justified in case when inflation does not exceed 4-6%,” – said in the Central Bank. Target annual inflation rate of 4%, the Bank of Russia expects to achieve by the end of 2017. According to Rosstat, by the end of September 2016, its level was 6.4%. In addition, the security complex of banknotes will be enhanced with the use of the latest developments of Goznak, told RBC in the Bank of Russia.

“New bills in the structure of cash turnover will press the first of all smaller denominations – 100 RUB. and 1000 RUB., 500 and 5000 RUB., since issued as “intermediate” between them, for convenience largely is specified denominations” – analyst GK TeleTrade mark in real. Small notes-200 rubles will not take a meaningful share as the share in turnover of the nearest denomination of the banknote 500 rubles at the beginning of the year amounted to only 4.1%, he said.

“Bill in 2000 rubles. is able to reduce the share of the five thousandth, which occupied 70.5% of turnover in early 2016, and thousandths, which had 23.6% of turnover. Gradually, it may take about 30-35% of the total amount of cash,” predicts mark in real. The need for new cuts for business are low, except for retail trade, the analyst adds. The population will be willing to use the innovation, said Goikhman.

The money supply issue new banknotes meaningful impact will, say the experts interviewed by RBC. “It is unlikely that the circulation will be large compared to the 6.2 billion notes, which are now in circulation. Possible local surge of the money supply in 2017, but a significant impact on the economy, he will not have” – calculates a senior analyst “Alpari” the novel Tkachuk. According to Goihman, issuance of new notes does not constitute an extra hidden issue. If necessary, it the Central Bank would prefer a less expensive version of the non-cash form, he says.

The contribution of the release of new bills to inflation if you will, it will be small, says Tkachuk. “The rise in consumer prices in recent years has led to a shift in the demand for banknotes with a larger face value. And already reacting to this, the Central Bank decided to issue new banknotes”, – he said. But Tkachuk did not rule out that printing new banknotes a little speed up real inflation, because sellers will round prices on a number of products to 200 and 2000 rubles., Theoretically, the inflation expectations of the population could affect only the issue of banknotes with nominal value above 5000 RUB, says the Manager of research and Analytics PSB Alexander Polyutov.

In addition, the Central Bank announced to increase the convenience of calculations for the population, the regulator reduces the issue of banknotes of new denominations of the cost of production of money, said Goikhman. “The higher the value, the less the production cost of cash, and their conversion, storage, transport. The cost of a single sheet advantage 2000 RUB two times lower than on two sheets of 1,000 rubles,” he says.

The last time bill new denomination (5000 rubles) was produced in 2006. Data from Rosstat shows that in the past 10 years, the cumulative inflation rate exceeded 99%. “Without the new banknotes would have to produce more and more of the former, which increased the cost of production,” said Goikhman. The initial costs for the development and introduction of the new money will pay off in this economy, he admits.

The website for online voting to select symbols for banknotes of new denominations your-Russia.of the Russian Federation was launched by the Bank of Russia on 28 June, two months after the announcement. By September, formed the final list of 10 leaders. These are Vladimir, Volgograd, far East, Irkutsk, Kazan, Nizhny Novgorod, Petrozavodsk, Moscow, Sergiev Posad and Sochi. The final stage of voting on the website was carried out from 5 September to 7 October. In addition, voting was conducted in early October at the open house of the Central Bank in 84 cities of Russia.