Publication: Monitor Volume: 2 Issue: 163

On September 2 Ukraine officially introduced its national currency, the hryvna. As of yesterday all disbursements by state organizations were reportedly being made in the new currency. Under an August 25 presidential decree on currency reform, the hryvna replaces the karbovanets, the provisional currency unit in use since late 1991. The new currency is being issued in banknotes with a face value of 1, 2, 5, 10, 20, 50, and 100. The exchange rate has been set at 1.76 hryvna to the U.S. dollar, 1.20 hryvna to the German mark, and 1 hryvna for 3,000 Russian rubles. As a preventive anti-inflationary measure, the government has frozen the prices of goods and services for 30 days starting September 2. Citizens may exchange unlimited sums of their karbovantsy at a rate of 100,000 for 1 hryvna until September 16, during which time both currencies will be in use. Hryvna equivalents of up to 100,000,000 karbovantsy are being paid out to citizens in cash, while sums above that amount are being credited to the citizens’ bank accounts. State exchange offices have been set up throughout the country.

The hryvna banknotes were reportedly printed in the West in 1994, but the currency’s introduction had to be postponed repeatedly until inflation was dramatically reduced to only 0.1 percent per month last June and July. The exchange rates set for the hryvna are equivalent to the latest rates of the stabilized karbovanets. The government expects a hryvna stabilization loan worth $1.5 billion from the International Monetary Fund next month. In their statements to the public, President Leonid Kuchma, Prime Minister Pavlo Lazarenko — who heads the state commission supervising the currency reform — and other senior officials are emphasizing that the reform is nonconfiscatory and transparent in character. (Interfax-Ukraine, Financial Information Agency, UNIAN, September 2 through 4)

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