Turning the pages back... August 25, 1996 (08/24/97)

UKRAINE'S INDEPENDENCE: THE SIXTH ANNIVERSARY

Turning the pages back...

August 25, 1996

The establishment of a new currency stands among the principal indicators of a country's degree of independence. Ukraine waited five years to introduce its hryvnia, as raging inflation sent its predecessor, the karbovanets, on a ride of precipitous devaluation.

On August 25, 1996, Vice Prime Minister Viktor Pynzenyk and National Bank of Ukraine Chairman Viktor Yuschenko went on national television to announce that the hryvnia would be introduced on September 2, pegging its value at 1.76 to the U.S. dollar, where it had been stabilized by an aggressive anti-inflationary policy. Mr. Pynzenyk noted with obvious satisfaction that buyers would require 3,000 Russian rubles to purchase 1 hryvnia.

Mr. Pynzenyk outlined the liberal time period (two weeks, with extensions provided for) for people to exchange kbv's for hrv's, and set no limits on the amounts Ukrainian citizens could exchange. Two days later, Mr. Yuschenko called a press conference and showed samples of the 1, 2, 5, 10, 20, 50 and 100 denominations that had been printed in Canada.

On September 12, 1996, Mr. Pynzenyk reported that 74.1 percent of the old currency's supply had been changed out. "Our prognosis as to how the transition would occur was more pessimistic. The people have proved us wrong, and we are pleased," he said.

This year, on August 20, Mr. Pynzenyk held a press conference to mark the currency's first anniversary, noting that the Ukrainian public, encouraged by the hryvnia's stability, were making deposits in bank accounts in growing numbers. According to the Eastern Economist, on August 21, the exchange rate to the U.S. dollar was 1.82 at Gradobank, and 1.83 on the street.

Sources: "Ukraine launches monetary reform, hryvnia to be put into circulation," The Ukrainian Weekly, September 1, 1996 (Vol. 64, No. 35); "Transition to hryvnia reported to be proceeding smoothly," The Ukrainian Weekly, September 15, 1996 (Vol. 64, No. 37).

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