On 1 September 2016, The Financial club news agency and Ukrainian Crisis Media Center with the support of the National Bank of Ukraine held a roundtable discussion entitled “How was the Ukrainian Currency Reform Implemented in 1996?".
The roundtable discussion featured the third President of Ukraine and ex-Governor of the NBU Mr Viktor Yushchenko, ex-Governor of the NBU Mr Volodymyr Matviyenko, NBU Deputy Governor Mr Yakiv Smolii, Former Deputy Governor of the NBU Mr Yaroslav Soltis, former Deputy Governor of the NBU Ms Vira Rychakivska, Co-Founder of Aval JSPPB Mr Oleksandr Derkach, former Director of the NBU Monetary Policy Department Ms Natalia Hrebenyk, first Head of the NBU Banknote Printing Works Mr Volodymyr Shtefan and former CEO of Oschadbank JSC Mr Anatolii Kolesnnikov. The event was moderated by Editor-in-Chief of the Financial club news agency Mr Ruslan Chornyi.
Mr Yushchenko provided insight into the overall political ideology underlying the currency reform implemented in September 1996. He reflected on making a televised announcement about the implementation of the currency reform in Ukraine which would replace the coupon-karbovanets with a new Ukrainian currency, the hryvnia. The then president of Ukraine Leonid Kuchma issued a Presidential Decree On the Currency Reform in Ukraine to this effect.
Pursuant to the Presidential Decree, the currency reform was carried out in Ukraine from 2 through 16 September 1996. On the first day of the reform all prices, tariffs, salaries, scholarships, pensions, money in the accounts of firms, institutions and organizations, as well as deposits of individuals were converted to hryvnia at the fixed exchange rate. Household deposits in karbovanets were converted into hryvnia deposits at the exchange rate of 100,000 karbovanets to 1 hryvnia without any limitations and confiscations. Mr Yushchenko underlined that it took some effort to advocate the need to carry out a non-confiscatory currency reform.
Mr Matviyenko stressed that the economic conditions that were in place in Ukraine in 1996 called for the need to carry out a currency reform.
During the period of 15 days — from 2 through 16 September 1996 — the hryvnia and the coupon-karbovanets were circulating in parallel, with a gradual withdrawal of the latter from circulation. After 16 September 1996, the karbovanets ceased to be accepted for all payments and the hryvnia became Ukraine's sole legal tender.
The Roundtable panelists gave their first-hand accounts of how the reform had been implemented and recalled some interesting and intriguing episodes related to the replacement of one currency with another. Mr Smolii reflected on his memories of the currency reform at the time when he was working at the NBU regional office in Ternopil.
“The NBU invest enormous efforts into the preparation and implementation of the currency reform. I remember being asked to work a night shift under wraps. Back then, the Ukrainian small coins were delivered to Ternopil by rail. The coins were unloaded by hand and transported to the bombproof shelter located in the town,” said Mr Smolii.
Mr Kolesnikov and Mr Derkach underlined the role played by banks in implementing the currency reform. Mr Kolesnikov stressed that Oschadbank JSC accounted for 50% of transactions involving the conversion of karbovanets into hryvnia. He also said that following the implementation of the reform its bank employees took pride in contributing to the state-building process and the successful implementation of the currency reform.
Mr Shtefan and Ms Rychakivska dwelled on the creation of the NBU Banknote Printing and Minting Works and its role in the implementation of the currency reform.
According to Ms Rychakivska, the currency reform posed a great challenge to the Ukrainian state, requiring tremendous policy, organizational, production and methodological efforts. And this task was successfully accomplished.