- Title: RUSSIA: Russian Central Bank prepares to launch 5000 rouble banknote
- Date: 7th June 2006
- Summary: CARS ON STREET
- Embargoed: 22nd June 2006 13:00
- Keywords:
- Topics: Finance
- Reuters ID: LVAEXPATXJ1VUVGXMOBVFX9ZQSEY
- Story Text: Russia's Central Bank is planning to launch a new 5,000 rouble (187 U.S. dollar; 100 GB Pounds Sterling) note, the latest sign of the country's wealth explosion.
While President Vladimir Putin is far behind his target of doubling Russia's GDP by 2010, few critics of the Kremlin would dispute that Russians are broadly getting richer, due to record prices for the country's oil. At the high end of society, this means that purchasers of a 10 million dollar country house can expect a free helicopter thrown into the deal, while at the lower end there are 88 mobile phones for every 100 Russians. The 36 richest people in the country are worth 110 billion US dollars between them.
A recent "Fine Arts" fair in Moscow, attracted large number of visitors, many of them intent on buying paintings and sculptures by world famous artists and expensive jewellery.
So the new 5000 rouble note will sit comfortably in the wallets of the country's 88,000 dollar millionaires and 33 billionaires, but is likely to be less useful for most of the population, for whom two of the notes are roughly a month's salary.
At the moment rich Muscovites must pay for their Gucci and Prada outfits with dozens of 1,000 rouble notes, the highest denomination currently available.
"These high denomination banknotes will be in high demand. And our task as the national bank is to make the cash circulation more convenient for people, so they don't have to pay in bundles of banknotes while purchasing certain goods. In our country we have a certain category of people who buy certain goods, paying large sums of money," said Vladimir Finogenov, who heads the anti-counterfeit unit at Russia's Central Bank.
Some Russian parliament deputies have criticised the plan to introduce the high denomination note, saying it would only help fuel the country's "grey" economy, encouraging more cash transactions.
At an upmarket shopping complex near the Kremlin in Moscow, reaction to the new banknote was mixed.
"I think it's a topical issue for our country, especially taking into consideration the rising prices and everything else. I think it (the new banknote) will be convenient for people," said Elena, an economist by profession.
Others said the new note would just be a nuisance to deal with.
"I don't think it's convenient for the people at all, because it will be a problem to get change from such a large note. It's not easy to break the 1000-rouble note, and with a 5000-rouble note it will be even worse," said Katya, a student.
(1 USD = 26.74 roubles/ 1 GBP = 50.08 roubles) - Copyright Holder: REUTERS
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