What is the Currency of Ukraine?
In 2016, the economy of Ukraine recovered by 2.4% due to a modest increase in agricultural production. The fourth quarter of the year witnessed a substantial growth OF 4.8 in the GDP boosted by growth in the manufacturing and domestic trade. The poverty level dropped slightly compared to 2015 due to high inflation and recession. There was an increase in fiscal deficit due to lower contributions to the social security fund, but the deficit was lower than anticipated due to increased revenue. The economy has remained fragile due to the disruptions in the country’s production and exports and the capital outflow has placed immense pressure on currency reserves undermining the monetary stability. The official currency used in the country is the Ukrainian hryvnia.
The Ukrainian hryvnia
The Ukrainian hryvnia (sign: ₴, code: UAH) was introduced on September 2nd 1996 and is the official currency of Ukraine. It is divided into 100 kopiyky (cents). The National Bank of Ukraine is responsible for production, circulation, and stability of the hryvnia
History of the Ukrainian hryvnia
After the Ukrainian National Republic separated from the Russian empire in 1917, it replaced its currency from the hryvna to the hryvnia. In the same year, it replaced the hryvnia with the first series of Karbovanets also known as the Ukrainian cupon. In 1992 Ukraine adopted its third series of the Karbovanets, but it was subjected to hyperinflation after the collapse of the USSR. In 1996, the hryvnia was introduced to replace the Karbovanets at a rate of 1 hryvnia = 100,000 karbovantsiv. The introduction of the hryvnia was secretive and ordered by a President's Decree on August 29th, 1996. Both currencies were used during the transition period between September 2–16, but banks and monetary merchants were instructed to issue the hryvnia only. In the first five days, 97% of the Karbovanets had been removed from circulation while the public was allowed to exchange the remaining in the banks. After Russia annexed Crimea on March 18th, 2014, the annexed state declared that it would no longer use the Ukrainian hryvnia as its currency and instead adopted the Russian ruble.
The hryvnia coins were minted in 1992 but were not released into circulation until September 1996 due to hyperinflation instead coins valued between 1 and 50 kopecks were being circulated. The one hryvnia-coin was introduced in March 1997. The National Bank of Ukraine declared that it would produce the two hryvnia-coins in October 2012, in 2013 the production of the 1- and 2-kopek coins was halted due to high production costs. As of 2016, there were about 12.4 billion coins worth 1.4 billion hryvnias.
The National Bank of Ukraine introduced the first series of the hryvnia banknotes in 1996 with the denominations of 1, 2, 5, 10, and 20 hryven. They were printed by the Canadian Bank Note Company in 1992 but were not circulated just like coins. The 50 and 100 hryven notes were also printed but were not distributed. In 1994 British company De La Rue printed the second series of the 1, 50, and 100 hryvnia notes, the 200-hryvnia note was introduced in 2001, followed by the 500-hryvnia note in 2006. The 2-hryvnia note is preferred by many compared to the 2-hryvnia coin. The 100 and 200 hryvnia notes are the most common notes, and most Ukrainian ATMs dispense these notes. In 2016, the National Bank of Ukraine began producing newer version of notes made of flax instead of cotton.
About the Author
Victor Kiprop is a writer from Kenya. When he's not writing he spends time watching soccer and documentaries, visiting friends, or working in the farm.
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