The Russian Ruble

 

In 1990, before Glasnost, the official value of the Russian Ruble was $1.61.  Immediately after it was de-controlled, it's official value fell to 100 Rubles to the dollar, and it was trading in banks at 160 Rubles to the dollar.   For the next 8 years, until January 1, 1998, it continuted to decline in value, reaching a record low of 5,997, at which time the Ruble was officially recentered with 1 New Ruble equaling 1,000 of the Old Rubles.  By August 24, 1998, it had reached 7,250 Old Rubles to the dollar, but the next day it plunged by 17% to 8,500, and by the beginning of the following month it had plunged another two thirds, reaching an all time low of 22,050 on September 7, 1998 in old Rubles and 22.05 in new Rubles.  Over the next four years, the value of the Ruble continued to decline, but not as dramatically as before, dropping by 31% to 31.85 by December 1, 2002.  This was a value 1/51,278th of its official pre-Glasnost value and 1/318th of its official post-Glasnost value.

The average Russian monthly income in 1991 was 1,500 Rubles, which was $2,415 per month at the pre-Glasnost official rate, $15 per month at the post-Glasnost official rate, and $10 per month at the actual rate.  With 50 million Russian workers, this is an annual personal income of only $1.45 trillion, half of the CIA's estimate that their GDP was $2.7 trillion.  But in actual dollars, this personal income was only $6 billion, which is 1/283rd of the CIA's estimate.

Where Russians have seen their monthly incomes explode 200 fold in Old Rubles, from 1,500 to 300,000 (or 1.5 to 300 New Rubles), their incomes in US dollars decreased 6%, from $10 to $9.42 per month.

It might not sound like this is a viable economy when viewed in dollars, but in Russia with Rubles, it's a reasonable standard of living.   Buying a Big Mac, fries, and a chocolate shake for $.60 isn't something that Russians do every day, but there are better, cheaper, more nutritional, and more interesting Russian restaurants within walking distance and outside of the tourist district which don't cost nearly as much.  I actually paid one cent for a nice Russian meal that included Borscht, something I wasn't too crazy about before that day, but there was something about paying only one cent that made it very appetizing.

http://www.oanda.com/convert/fxhistory