5 Korun – Czechoslovakia

In 1951, Czechoslovakia's currency situation was firmly embedded within the rigid framework of a Soviet-style centrally planned economy. The Czechoslovak koruna (Kčs) was a non-convertible "soft currency," meaning it could not be freely exchanged for foreign hard currencies like the US dollar or Swiss franc. Its value and use were strictly controlled by the state, with an official exchange rate set arbitrarily for accounting purposes, bearing little relation to its actual purchasing power or market value. The primary function of money was as an internal unit of account to facilitate the state plan, rather than as a tool for market exchange.

The monetary landscape was characterized by a complex system of currency separation and repressed inflation. A key feature was the existence of two distinct types of money: the domestic koruna used by citizens for everyday goods, and the internally convertible "foreign exchange koruna" used in special Tuzex hard-currency stores. These stores, stocked with high-quality imported or luxury goods unavailable in regular shops, could only be accessed with vouchers purchased using Western hard currencies or special certificates. This created a privileged economic channel for those with access to foreign remittances or export bonuses, starkly highlighting the disparity between the official economy and the reality of scarcity.

This system was a direct result of the state's prioritization of heavy industry and military production, which led to chronic consumer goods shortages. With wages paid but little of value to buy in state shops, excess koruna piled up in savings accounts, creating a massive "monetary overhang" – pent-up inflationary pressure held in check only by administrative controls and rationing. The black market thrived as a necessary corrective, where the koruna traded at a fraction of its official rate against hard currencies, revealing its true, much weaker value. Thus, the currency situation in 1951 was one of strict control masking underlying economic weakness and social inequality.