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1990-1991 First Exchanges at the Post-Soviet Space
December 28, 2006 12:27

Before November 1, 1990, the dollar cost 63 kopecks, but there was no opportunity to buy it at such a rate. November 1 of the year 1990 established a commercial rate of 1.8 rubles per dollar. The first trading session was opened on April 9, 1991, in one of the premises of the USSR State Bank, where a blackboard had providently been brought in order to record deals. Following the only concluded transaction (for 50 thousand cashless dollars) the ruble was for the first time ever rated commercially. The real exchange rate of the US dollar against the ruble made up 32.35 rubles per dollar. By the end of the year one dollar was estimated at 169.20 rubles under inflation of about 160% (the percentage is very approximate, as there is no accurate statistics). Prices were set free, people felt lack of products in shops, the USSR collapsed but the Russian Federation hadn’t been formed yet. This period turned to be the time of troubles for former Soviet people.

At the same time stock exchanges entered the market, though the process of their formation was quite spontaneous. The first Russian Exchange was registered in May of 1990 and was called Moscow Commodity Exchange. November 21, 1990, Moscow Central Stock Exchange was the second on the list. The first valuable securities trading session in the USSR was held only several months later.

In general by the end of 1991 Russia registered 182 commodity and stock exchanges. The RF left behind the whole planet by number of exchanges and variety of concluded transactions. That time Russian exchanges used to trade any possible commodities and security papers. When the Soviet supply system wrecked, exchanges took on a role as middlemen. The majority of goods were in deficit, even money: the president of the State Bank complained in his secret letter to M.S. Gorbachev that the Finance department failed to mint enough money to keep pace with inflation.

New Russian exchanges traded wood, sugar, paper, building materials, cars, computers and even bread! Very soon Russia numbered over 1000 exchanges, though most of them couldn’t be called traditional stock structures, as essentially they operated as trade fairs.

First rare bidders had to face an absolute lack of legislation regulating trading sessions and transactions. One of the most intrinsic legislative initiatives of 1990 happened to be the Commodity Exchange Activity Resolution of the RSFSR Cabinet Council. The resolution maintained the order of exchanges’ registration and heir functions. The distinctive feature of laws passed then is their laconism. The most significant laws regulating the stock market appeared in December of 1991.

Despite the chaos ruling the market after the USSR collapse, there had already existed companies, which later came to prominence. It’s hard to define the field of their activity then, but it is known that January 18, 1991, the today’s Russian leading investment company Troika Dialog was founded, and in 1991 the information agency AK&M was established.



Olga Pletneva

Tags: Russian trade Russian business history of Russian business Russian entrepreneurs  

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