Paper Money

Magazine honors National Bank of Ukraine for modernization efforts

The Bank of Ukraine added a 1,000-hryvnia note to its issues in 2019. The bank was recently honored for its efforts at currency reform for upgrades to its coins and bank notes.

Images courtesy of the Bank of Ukraine.

It’s award season for more than movies. It even extends to central banking. The magazine, which covers all aspects of the field, presented over a dozen awards on March 25.

The National Bank of Ukraine was named best currency manager for its actions to reduce currency denominations while upgrading its bank notes and coins. It is the second time the NBU has won an award from the journal.

The website magazine explained the predicament the country found itself in by 2014, when even more than 20 years after the breakup of the Soviet Union, little had yet changed in terms of currency management.

Within a year from then, its new currency, the hryvnia, had declined by 70% against the dollar, and the National Bank decided to revamp its entire system at once. After consulting with commercial banks, other central banks and the public, it decreased the number of denominations in circulation from 16 to 12. Among the factors considered were frequency of usage for denominations, handling costs, and public benefits. Ninety percent of the public were in favor of discontinuing the lowest denominations.

The lowest paper values, 1-, 2-, 5- and 10-hryvnia denominations became coins, and their useful time in circulation changed to decades, rather than from one to three years. In 2019 it added a 1,000-hryvnia note to the 20-, 50-, 100-, 200-, and 500-hryvnia notes already in use (100 hryvnia is about $3.60).

The bank opted for paper rather than polymer, but to increase longevity, it added Ukrainian flax fibers to the most-used values. It also added new security features, while maintaining the colors, size differentials between values, and the basic design on each of a historical figure on the front and architecture on the back.

Among the most interesting revelations was that the bank used the issue of commemorative bank notes to test new security features before putting them on a regular issue. All work was done by the NBU Banknote Printing and Minting Works. In June 2018, the NBU and Crane Currency signed an “Agreement on Cooperation in the Field of Currency Production.” It includes the placement of production for foreign currencies at the NBU printing facility. The annual total production is currently about 1.8 billion bank notes.

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