1, 5 Kopeks Lose Favor in Russia|
March 25, 2013
Russia no longer mints 1- and 5-kopek coins, but the two denominations remain legal tender. Russia’s central bank is asking why, but the decision regarding the future of these coins lies in the hands of Parliament.
There are an estimated seven billion 1-kopek and an additional six billion 5-kopek coins now in circulation. The kopek is worth about 0.03 cents U.S.
As an article in the Jan. 25 Wall Street Journal put it, “Shops in affluent Moscow rarely accept 1-kopek and 5-kopek coins. They can’t be used in vending machines and shoppers often throw them away. The bank stopped minting them, but officially they are still in circulation and banks are obliged to accept them.”
Should the coins be demonetized it would save banks storage and labor costs, however as in the United States it is the government rather than the bank that is taxed with the responsibility to supply coins for circulation that makes that decision. At the time this article was being written there was no indication Parliament was ready to address the problem.
The denominations were introduced in 1998 as part of a coinage reform following the demise of the Soviet Union, the unsuccessful Commonwealth of Independent States, and hyperinflation. The modern Russian ruble had initially been valued at about 60 cents U.S. By 1997 it took 6,000 rubles to equal one U.S. dollar. During the currency reform three zeros were removed from all currency, making the Russian ruble equal approximately to the French franc.
France now uses the European Union euro currency, which includes a 5-cent coin. The French 5 centime is no longer legal tender. The EU currency also includes 1- and 2-cent denominations.
Meanwhile, the ravages of inflation have decreased the purchasing power of the Russian ruble, while the cost of striking the steel composition 1- and 5-kopek coins rose to become greater than are their face values. While demonetizing the two coins was not a priority, the expense of producing them was, which prompted Russian Parliament to allow the Bank of Russia to stop making them.
Russia still strikes coins for circulation in denominations of 10 and 50 kopeks as well as 1, 5, and 10 rubles. According to the Wall Street Journal article, it now costs more than the face value of both kopek denominations as well as the 1-ruble coin to strike each of them.
The 1 kopek is a 15.5 millimeter diameter copper-nickel clad steel composition coin. The Cyrillic letter M for the Moscow Mint or C-II for the mint at St. Petersburg appear at the front hoof of the horse. The denomination numeral dominates the reverse. The 5 kopek is similar, but has a diameter of 18.5mm.
St. George slays a dragon on the obverse of both the 1- and the 5-kopek coins. Let’s hope that dragon symbolizes inflation.
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