If you thought it was difficult to get change from a UAH 500 note, just wait until autumn 2019! National Bank of Ukraine (NBU) Governor Yakiv Smolii recently presented the country’s new UAH 1,000 banknote, which will enter circulation on 25 October and immediately become the bane of cashiers across the country.

The new banknote features a portrait of Ukrainian scientist Volodymyr Vernadskiy, one of the fathers of modern geochemistry and founder of the Ukrainian Academy of Sciences, which appears on the opposite side of the bill. The UAH 1,000 banknote will be the highest value denomination issued by the NBU to date, ending the 13-year reign of the UAH 500 as the country’s largest bill and representing a new landmark in the modern history of Ukraine’s national currency. 

The launch of the UAH 1,000 banknote is part of a broader revision of the Ukrainian currency that will see smaller denomination coins and notes gradually phased out over the coming few years. The NBU is seeking to adjust the country’s cash flow to reflect the new economic realities of rising prices and growing salaries following the 2014-15 devaluation of the hryvnia. From 1 October 2019, the one, two and five kopek coins will cease to be legal tender, while the twenty-five kopek coin will undergo a gradual withdrawal from circulation. By 2022, new coins will fully replace the one, two, five and ten hryvnia banknotes.

The story of the hryvnia stretches back to the early days of Ukrainian history and the Kyiv Rus era, when “hryvnia” was the term for one form of coinage then in use. During Ukraine’s ultimately thwarted statehood bid of 1917-21, the Ukrainian authorities chose “hryvnia” as the name for the new national currency. The Central Rada in Kyiv passed the necessary law introducing the hryvnia as the monetary unit of the fledgling state on 1 March 1918. The hryvnia banknotes of the time featured the trident crest and other state symbols that would later reappear in today’s independent Ukraine.  

The currency launched in spring 1918 eventually suffered the same fate as Ukraine’s early twentieth century statehood ambitions, but the hryvnia was destined to make a comeback in the 1990s following the collapse of the Soviet Union and the dawn of Ukrainian independence. Printing of the first post-Soviet hryvnia banknotes actually took place in Canada in 1992, but the launch of the currency did not happen until September 1996 in order to allow the Ukrainian economy to overcome a period of extreme turbulence and hyperinflation.

The modern hryvnia has experienced periods of relative stability alongside a number of sharp drops in value. The first major devaluation came in summer 1998 as the meltdown of the Russian economy sent shockwaves through neighboring Ukraine. With memories of the mid-1990s hyperinflation still fresh in people’s minds, queues soon formed at exchange booths as the hryvnia lost almost half its value in a matter of days. The global credit crunch crisis of 2008 ignited the next big scare for the hryvnia, which rapidly fell from five to eight against the US dollar. In retrospect, these panics now appear relatively minor when compared to the collapse of 2014-15. With Crimea under Kremlin occupation and Russian tanks advancing in eastern Ukraine, the hryvnia went into freefall, reaching an all-time low of UAH 30 to the US dollar before eventually stabilizing at a greatly reduced rate.   

Ukraine’s national currency has since enjoyed somewhat better days, with the improving Ukrainian economy and shrewd monetary policies pursued by the NBU allowing for relative stability despite the adoption of a floating exchange rate. Indeed, the hryvnia advanced over 9% against the US dollar during the first seven months of this year, making it the world’s best-performing currency in dollar terms so far in 2019. 

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