Hyperinflation, Banking In Russian Federation And Monetary Policy In Rubble Area, 1992-1995

United Soviet Socialistic Republics collapsed/was collapsed at the end of 1991 and independent Russian Federation appeared. The USSR banking system changing in the Gorbachev era was dragged to chaos in the late of 1991. The banking system regulated partly after accepting the new laws in Russian Federation. Inflation had not been controlled. Producer price index (PPI) reached to 3275 % in 1992.The inflation Banking was one of the most profitable businesses in the first half of the 1990’s because the Central Bank of Russian Federation’s rate of interest was lower than inflation. The numbers of banks which were opened exceeded the thousand at that time. In the middle of 1990’s function of the Central Bank of Russian Federation (CBR) was expanded because of the inflation and derangement in the banking. In the middle of 1990’s CBR was transformed from the government institutions to the independent institutions. In Russian Federation was confusion in monetary policy and banknotes in the first half of the 1990’s. Circulation of the banknotes of the USSR continued in 1992 and 1993. Old banknotes of the USSR and RF banknotes changed with the new ones in 1993. The two tests of rubble area were not successful. In the test period in the republics’ rubles and coupons circulated together. All the old USSR republics issued their own currencies until the middle of 1995 and they started their own independent currency policies.