Word: sovietism
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Dates: during 1980-1989
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Among superpower currencies, the Soviet ruble gets no respect. Its official value is so overstated after decades of isolation from the marketplace that even Soviet citizens treat it as funny money. In the past year Soviet economists have openly acknowledged that the ruble's official rate of exchange with Western currencies was seriously out of whack. While the Soviet state bank, Gosbank, gave visiting foreigners only 0.65 rubles for every U.S. dollar, a thriving black market offered as much as 15 rubles. An internal study done for the Central Committee of the Soviet Communist Party reportedly estimated the ruble...
...Politburo, giving itself plenty of time to reconcile the currency with reality, voted a year ago to begin "steps to ensure the ruble's convertibility" by the year 2000. So Sovietologists in the West were caught by surprise last week when Gosbank announced that it would devalue the Soviet currency 90% for transactions that do not involve imports or exports. Foreign visitors will get much more bang for their buck: 6.26 rubles per dollar. But Soviet citizens traveling abroad will receive a paltry 16 cents per ruble instead of the official $1.60, which will seriously hamper their ability...
Last week's move was just a small step toward making the ruble freely convertible to other currencies, a process that will have to be done gradually over many years to prevent disruptions in the Soviet Union's economy. The ruble's nonconvertibility has been a major barrier to East-West joint ventures...
Western visitors will not reap many bargains from last week's step, which in practical terms will apply to a small portion of transactions. Tourists are generally asked to pay in foreign currency for lodging, transit and food. And as Soviet citizens know painfully well, the ruble is virtually worthless in the domestic economy. Moscow cabbies speed past hapless hailers unless they hold up something more enticing: a greenback or a pack of Marlboro cigarettes...
...reason Soviets have little use for their own currency is the shortage of consumer goods to buy. The result is that thegoods have become the storehouse of value rather than the money, as in hyperinflationary economies. A leading Soviet economic official told a visiting American that his neighbor had a seven-year supply of detergent in his tiny apartment...