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Soviet Union [USSR] Financial System
The ruble, consisting of 100 kopeks, is the unit of currency.
In the mid-1980s, the ruble (for value of the
ruble--see Glossary)
was a purely internal currency unit, and the government fixed its
rate of exchange with foreign currencies somewhat arbitrarily. The
State Bank (Gosudarstvennyi bank--Gosbank) issued currency and
established its official gold content and thus its exchange rate
with foreign currencies. The real value of the ruble for purchase
of domestic consumer goods in comparison with the United States
dollar was very difficult to determine because the Soviet price
structure, traditionally established by the State Committee on
Prices, differed from that of a market economy.
The banking system was owned and managed by the government.
Gosbank was the central bank of the country and also its only
commercial bank. It handled all significant banking transactions,
including the issuing and control of currency and credit,
management of the gold reserve, and oversight of all transactions
among economic enterprises. Because it held enterprise accounts,
the bank could monitor their financial performance. It had main
offices in each
union republic (see Glossary) and many smaller
branches and savings banks throughout the country. The banking
system also included the Foreign Economic Activity Bank and the
All-Union Capital Investment Bank. The latter bank provided capital
investment funds for all branches of the economy except
agriculture, which was handled by Gosbank.
Because the banking system was highly centralized, it formed an
integral part of the management of the economy. The Ministry of
Finance had an important role to play in the economic system, for
it established financial plans to control the procurement and use
of the country's financial resources. It managed the budget in
accordance with the wishes of central planners. The budget had
traditionally allocated most of the country's investment resources
(see Soviet Union USSR - Tools of Control
, this ch.). The reforms of the mid-1980s,
however, required enterprises to rely to a greater extent on their
own financial resources rather than on the central budget. These
reforms also called for the creation of several new banks to
finance industrial undertakings, ending the monopoly of Gosbank.
Enterprises would seek and receive credit from a variety of banks.
Citizens could maintain personal savings accounts and,
beginning in 1987, checking accounts. These accounts, initially
limited to the Russian Republic, were offered by the newly formed
Labor Savings and Consumer Credit Bank. Over the years, personal
savings accounts had accumulated massive amounts of money, growing
from 1.9 billion rubles in 1950 to 156.5 billion rubles in 1980.
The savings represented excess purchasing power, probably the
result of repressed inflation and shortages of quality consumer
goods.
Data as of May 1989
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