1996 Ukrainian monetary reform

Monetary reform in Ukraine March 2024 Ukrainian banknotes before and after the 1996 monetary reform 500 UkraineP97-100000Karbovantsiv-1994 f-donated.jpg Obverse of a 100,000 karbovantsiv banknote, withdrawn following the reform 1 Hryvnia 1992 front.jpg Obverse of a one hryvnia banknote, placed into circulation following the reform at a rate of 100,000 karbovantsiv The 1996 Ukrainian monetary reform was carried out from 2 to 16 September 1996 according to a decree by president Leonid Kuchma, and oversaw the replacement of the Ukrainian karbovanets with the new Ukrainian hryvnia in accordance with the Constitution of Ukraine, adopted the same year. Karbovantsi were exchanged for hryvnias at a rate of 100,000 to 1, with exchanges continuing freely until 1998. The monetary reform helped to launch the political career of Viktor Yushchenko, who oversaw it in his capacity as head of the National Bank of Ukraine. Background As part of the broader dissolution of the Soviet Union, Ukraine declared independence in August 1991. The declaration of independence noted the necessity of an independent monetary system and currency in order to establish Ukraine's financial and political independence from the Soviet Union. On 9 September 1991, a bill in the Verkhovna Rada (Ukrainian parliament) titled "On Introduction of Reusable Coupons Into Circulation on the Territory of the Republic" passed, which was followed on 10 January 1992 by the National Bank of Ukraine issuing temporary banknotes named "karbovanets",Kravchuk Leonid 9 September 1991 Про введення в обіг на території республіки купонів багаторазового використання On Introduction of Reusable Coupons Into Circulation on the Territory of the Republic https://zakon.rada.gov.ua/laws/show/1519-12 1 March 2024 Verkhovna Rada uk though they were also popularly known as "coupon-karbovanets". The former Soviet ruble continued to be accepted as legal tender until being taken out of circulation on 12 November 1992.Olynec Natalia 31 August 1996 In Ukraine, a currency debuts https://www.washingtonpost.com/archive/business/1996/09/01/in-ukraine-a-currency-debuts/604ab690-9832-4f7a-93a7-1e36dec8e41e/ 1 March 2024 The Washington Post Following its introduction, the karbovanets was initially slightly above parity with the Soviet ruble due to a shortage of supply compared to demand. By April 1992, however, karbovantsi were circulating at such a level that they had reached parity with the former Soviet ruble, and in November 1992 all Soviet rubles were exchanged to karbovantsi in the form of cashless transfers. Intended to last for only four to six months, the karbovanets instead remained in use until 1996, bearing the brunt of inflationary pressures.1 September 2011 Взлеты и падения гривни Rise and fall of the hryvnia https://glavcom.ua/publications/115167-vzlety-i-padenija-grivni.html 1 March 2024 Glavcom ruІсторія національної валюти України History of National Currencies of Ukraine https://bank.gov.ua/control/uk/publish/article?art_id=36714 dead https://web.archive.org/web/20180706215254/https://bank.gov.ua/control/uk/publish/article?art_id=36714 6 July 2018 1 March 2024 National Bank of Ukraine ukPanchenko Aleksandr 9 November 2007 Когда украинцы были миллионерами: 15 лет назад у нас ввели купоны When Ukrainians were millionaires: 15 years ago, we were given the coupon https://ukraine.segodnya.ua/ukraine/kohda-ukraintsy-byli-millionerami-15-let-nazad-u-nac-vveli-kupony-80015.html https://web.archive.org/web/20210517034307/https://ukraine.segodnya.ua/ukraine/kohda-ukraintsy-byli-millionerami-15-let-nazad-u-nac-vveli-kupony-80015.html dead 17 May 2021 1 March 2024 Segodnya ru Canada and the United States began to print Ukraine's permanent new currency, the hryvnia, in 1992. Hyperinflation, however, made the introduction of a new currency pointless at the time. By 1993, the level of inflation on the karbovanets had reached 10,000% according to the National Bank. To introduce the hryvnia would cause rapid devaluation and leave it effectively worthless, so the Ukrainian government took the controversial decision to peg the karbovanets to the United States dollar. In doing so, it hoped to establish a sense of stability and trust in the economic situation, by which introduction of the hryvnia would become possible. Over the next two years, more favourable conditions were created by the strengthening of commercial and official exchange rates with the United States dollar. + US$1.00 exchange rate to UAK, yearly 1992 1993 1994 1995 208 4,539 31,700 147,463 In addition to hyperinflation, the karbovanets struggled from an almost total lack of security measures and poor paper, which enabled the creation of counterfeits by anyone owning a printer. As a result, almost 14 billion counterfeit karbovantsi were present in the economy by 1996. Seeking to counteract these problems, primary aim of the monetary reform was a policy of devaluation, as part of broader measures to establish economic stability with a new currency. Hryvnia production The design for hryvnia banknotes was done by Ukrainian artist and writer Vasyl Lopata during an April 1991 competition for the currency of the Ukrainian SSR. Other participants in the competition besides Lopata included Oleksandr Danchenko (artist) uk Данченко Олександр Григорович Oleksandr Danchenko, Vasyl Perevalskyi uk Перевальський Василь Євдокимович, Volodymyr Yurchyshyn, and Serhii Yakutovych uk Якутович Сергій Георгійович. Lopata's work was displayed before the Verkhovna Rada (Ukrainian parliament) committees on economic reform and culture, being approved by Chairman of the Verkhovna Rada Leonid Kravchuk.Yashchenko Anna 29 September 2007 Василий Лопата не только рисует гривни, но и пишет о них Vasyl Lopata doesn't just design hryvnias: he writes, too https://www.unian.net/society/67569-vasiliy-lopata-ne-tolko-risuet-grivni-no-i-pishet-o-nih.html live https://web.archive.org/web/20171226020802/https://www.unian.net/society/67569-vasiliy-lopata-ne-tolko-risuet-grivni-no-i-pishet-o-nih.html 26 December 2017 1 March 2024 Ukrainian Independent Information Agency ru Lopata's designs were sent to Canada in 1992 to be printed by the Canadian Bank Note Company.1 September 2006 Гривні-іммігрантки Immigrant hryvnias https://zn.ua/ukr/finances/grivni-immigrantki.html live https://web.archive.org/web/20180913150542/https://zn.ua/ECONOMICS/grivni-immigrantki.html 13 September 2018 1 March 2024 Dzerkalo Tyzhnia uk Coinage was produced by the government of Italy, as well as Luhansk Cartridge Works uk Луганський патронний завод.Shliakhtin Andriy 4 August 2016 1996 – рік запровадження повноцінної власної валюти 1996: The year a full-fledged, native currency was introduced https://24tv.ua/economy/1996__rik_zaprovadzhennya_povnotsinnoyi_vlasnoyi_valyuti_n711739 live https://web.archive.org/web/20171024095704/http://24tv.ua/1996__rik_zaprovadzhennya_povnotsinnoyi_vlasnoyi_valyuti_n711739 24 October 2017 1 March 2024 24 Kanal uk Reform According to Viktor Suslov uk Суслов Віктор Іванович, a participant in the reform, a month prior to Kuchma's "On Monetary Reform in Ukraine" decree, a commission on studying the feasibility of monetary reforms had been established, headed by Pavlo Lazarenko as Prime Minister of Ukraine and including economists Viktor Yushchenko (then head of the National Bank of Ukraine), Viktor Pynzenyk, Suslov, and Volodymyr Stelmakh. On 25 August 1996, Kuchma signed the decree "On Monetary Reform in Ukraine", which formally established the hryvnia and subdivided it into 100 kopiyok.Kuchma Leonid Leonid Kuchma 25 August 1996 Указ президента України про грошову реформу в Україні Act of the President of Ukraine on Monetary Reform in Ukraine https://zakon.rada.gov.ua/laws/show/762/96#Text 1 March 2024 Verkhovna Rada uk This was followed on 2 September 1996 by the National Bank of Ukraine introducing six banknotes for the hryvnia (numbering 1, 2, 5, 10, 20, 50, and 100), as well as six different coins for the kopiyka (numbering 1, 2, 5, 10, 25, and 50). Exchanges between the old karbovanets and the new hryvnia occurred at a rate of 100,000:1, and the former currency was completely removed from the economic supply by 16 September 1996. After that date, exchanging from karbovantsiv to hryvnias was only possible in banks until 1998, when the exchange process ended.3 February 2016 Гривна. История денег, которые не стоят ничего The hryvnia: history of a worthless currency https://rian.com.ua/analytics/20160203/1004658389.html 1 March 2024 RIA Novosti ru Legacy The reforms were successful in restoring confidence in the Ukrainian economy and reducing inflationary pressures; inflation dropped to 40% by the end of 1996 and further to 10% by 1997. Despite the damage to Ukraine's economy as an effect of the 1998 Russian financial crisis, declines in real GDP decreased year on year going into 1999.Petryk Oleksandr August 2006 History of Monetary Development in Ukraine https://www.bankandcredit.nbp.pl/content/2006/2006_08/petryk.pdf Bank I Kredyt 9–10 National Bank of Poland The 1996 monetary reform also introduced Viktor Yushchenko to the national political scene, allowing him to ultimately become President of Ukraine following the 2004 Ukrainian presidential election and Orange Revolution.Harasymiw Bohdan Yushchenko, Viktor https://www.encyclopediaofukraine.com/display.asp?linkpath=pages%5CY%5CU%5CYushchenkoViktor.htm 1 March 2024 Encyclopedia of Ukraine However, the process of denomination has been more recently attributed to Vadym Hetman, Yushchenko's predecessor, who has been popularly named as "Father of the Hryvnia" in recognition of his achievements.22 July 2005 «Батько» гривні став Героєм України "Father" of the hryvnia becomes Hero of Ukraine https://zib.com.ua/ua/2452.html 1 March 2024 Law and Business uk References Category:1996 in Ukraine Category:Economic history of Ukraine Category:Leonid Kuchma Category:Viktor Yushchenko Category:Reform in Ukraine