The NBU has for the second time won a prestigious international award from the Central Banking Journal, an international magazine covering developments in banking.
This year’s award recognizes the NBU’s achievement in the Currency Manager category for its sweeping efforts in recent years to optimize currency denominations while upgrading Ukrainian banknotes and coins.
The Currency Manager award acknowledges a central bank that has made improvements to its cash circulation management processes. This award previously went to the Central Bank of Mexico in 2020, the Bank of Israel in 2019, and Norges Bank in 2018.
“We are sincerely grateful to Central Banking for appreciating our work. It is an honor for the NBU, which has worked hard to conduct a large-scale optimization of hryvnia banknotes and coins, safeguard the Ukrainian currency using state-of-the-art global technologies, and modernize its design. “We continue to take care of the Ukrainian currency and are already thinking about its further development,” said Viktor Zaivenko, director of the NBU’s Cash Circulation Department, who has long been coordinating work to improve money circulation in Ukraine.
Having conducted a detailed study of global best practices, the NBU in 2014 began to gradually and systematically implement changes to improve cash circulation. Since the introduction in 1996 of the national currency, the Ukrainian economy and consumer behavior had changed, while noncash payments had become widespread. Those changes prompted the NBU to take decisive actions to reduce the number of hryvnia banknote and coin denominations from 16 to 12. Thus, Ukraine currently has six coin and six banknote denominations in circulation, in line with global best practices.
As part of its consistent and comprehensive measures to reform the cash circulation system, the NBU:
removed the 1, 2, 5, and 25 kopiika coins from circulation (the latter denomination having been rendered unusable by new rounding rules).
converted the smallest-denomination banknotes into coins
introduced a new high-denomination banknote – the 1,000 hryvnia
integrated cutting-edge security features into the design of the new-generation banknotes.
As it overhauled its coin and banknote denominations, the NBU looked globally at what was viewed as best practices in cash circulation management and conducted extensive surveys with members of the public and the business community.
“The most useful discussions were with the commercial banks and retailers, which said they supported the decision to withdraw the smallest coin denominations from circulation. Among other things, we asked them which coin denominations were used the most, and which were the most costly to handle. Our decision to overhaul the coin and banknote series was also supported by other government agencies, including fiscal authorities,” said Oksana Halyts, deputy director of the Cash Circulation Department, who was directly involved in this process since its inception.
The Ukrainian central bank was also concerned about the quality of cash in circulation, deciding to replace low-denomination banknotes with appropriate coins, she said. As Ukraine underwent socioeconomic changes, there came the need for a banknote with a higher denomination than the 500 hryvnia note, and so the NBU also introduced the 1,000 hryvnia banknote.
“The new banknote incorporates top-notch design and security technologies. In design, it imitates the highly secure banknotes of the new modernized generation of the hryvnia – the upgraded 100, 200, and 500 hryvnia banknotes. All of these bills have been fitted with paper protection elements and the latest print security features, including a window thread and an optically variable element known as SPARK. Thanks to these upgrades, everyone can independently and easily verify the authenticity of the banknotes,” said Volodymyr Bahlai, CEO of the NBU Banknote Printing and Minting Works.
It was the NBU Banknote Printing and Minting Works that successfully completed the task of improving the design of and manufacturing the new-generation hryvnia coins and banknotes with enhanced protection.
“The main idea and goal of all of these changes is simplification, reliability, and convenience. This optimization increases the protection and quality of money and makes cash payments orderly and comfortable. We also took care to reduce public spending on cash circulation in the country. The state will save UAH 90 million a year by reducing the cost of production and processing of low-denomination coins, and a further UAH 1 billion over the next few decades through the replacement of low-denomination banknotes with coins,” said Viktor Zaivenko.
Central Banking is a UK-based publication founded in 1990. It issues the Central Banking Journal and a number of books and whitepapers, and hosts the annual Central Banking Awards. Central Banking also conducts educational professional events for central bankers and financial market participants.
Central Banking is a top international publication for central bankers with readers in 130 countries and a subscriber base that includes central bankers in 120 countries. The Journal’s Editorial Advisory Board includes key figures of the global central bank community such as Jean-Claude Trichet, Ex-President of the European Central Bank and Governor of Banque de France, as well as economists from the world’s top universities, including Yale, Harvard, and Columbia.
Central Banking Awards is a series of awards granted annually by Central Banking, a publication that covers various topics in banking. The Central Banking Awards feature 26 categories, with 13 central bank categories and 13 financial market practitioner categories.
Central banks compete for awards in the following categories: Central Bank of the Year, Governor of the Year, Lifetime Achievement Award, Economics in Central Banking, Transparency Award, Reserve Manager, Currency Manager, Risk Manager, Green Initiative, Communications Initiative, Payments and Market Infrastructure Development, Website, and Initiative of the Year.
The first time the NBU won a Central Banking award was in the spring of 2019, when it received the Transparency Award, a prestigious international trophy that recognizes a central bank that has shown significant improvement in building a dialogue with its stakeholders.