National Bank of the Republic of Belarus

Supersized Currency on Europe's Fringes Defies Big Banknote Clamor

As some major central banks debate the future of their high-denomination bills, a former Soviet republic stranded between Russia and the European Union is about to increase the value of its biggest banknote 25-fold.

The central bank in Belarus, which is preparing for its third currency overhaul by dropping four zeros off the ruble this year, will make a 500-ruble ($231) note the highest denomination. Currently, a bill of 200,000 rubles, equivalent to about $9, is the largest one. The new note will become the most valuable in eastern Europe and compares with neighboring Russia’s largest bill of 5,000 rubles ($65).


An inadvertent holdout amid a growing scrutiny of the largest notes, Belarus is pinning hopes on the currency overhaul as it looks to remake an economy that contracted in 2015 for the first time in more than a decade and endured a spike in inflation to more than 100 percent three years ago. While the European Central Bank ponders withdrawing its 500-euro ($558) note to help combat crime, the Belarusian bill stands little chance of becoming the currency of choice for money launderers, terrorists and tax dodgers. 

“The ruble is not a generally convertible currency, dramatically reducing its utility as a medium of exchange outside of Belarus,” said Daragh McDowell, a senior Russia analyst at at Verisk Maplecroft, a Bath, U.K.-based global risk adviser. “It is highly doubtful that the Belarusian authorities can create a sufficiently stable macroeconomic environment for the ruble to reliably retain its value over time.” 

The ruble’s chequered past may be its biggest turnoff for crime lords. The currency ranked as the world’s fourth-worst performer against both the dollar and the euro last year. 

The central bank in Minsk has explained that the aims of the currency makeover, years in the making, are to improve the circulation of money, simplify accounting and cut the government’s maintenance costs. Produced in 2008 and stored in vaults because the move was delayed by the global financial crisis, the re-denominated banknotes will be put into circulation starting July 1. 

The plans have already hit snags. The new bills bear the signature of Petr Prokopovich, who resigned in 2011 after having heart surgery. The 50-ruble bill is stamped with what’s now a spelling mistake after changes instituted in the Belarusian language since the notes were printed.

--With assistance from Milda Seputyte

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