Bill in the 1000 hryvnia introduced for a reason: why it is needed

Купюру в 1000 гривен ввели не просто так: для чего она нужна

Recently, the national Bank of Ukraine reported about the appearance of the Ukrainians new denomination in nominal value of 1000 UAH. The emergence of “new money” there are always causes and effects.

What is the innovation correspondents “Dnieper panoramas” found on the website асtual.today

Periodic appearance of banknotes of a larger denomination – a natural and normal process: the money cheaper, and therefore, sooner or later, there is the need for expensive bills.

Now, however, economically developed countries gradually stop the production of these banknotes and removed them from circulation. So, in April of this year, Austria and Germany were the last countries that print the 500 Euro banknote.

The reason – banal, but critical: the 500 Euro banknote is useful for illegal transactions in cash. This is one of the “accepted” currency, thus expensive.

So European “patootie” was successfully used by corrupt officials and terrorists. Europe is heading for “white” economy, one component of which is payments. Which are not only easy to implement, but also easy to control.

Ukraine also declared the movement to cashless payments, in particular, an upper limit for cash transactions (50 thousand UAH), and in parallel, the NBU announces the advent of electronic hryvnia for cashless payments… But strong bill will do exchange cash only the.

The whole point of inflation?

One of the reasons for the introduction of banknotes for 1000 UAH and “monetization” UAH smallest value of depreciation of cash turnover. Paper notes, especially low denomination that are used often are long – on average about 2 years.

Worn-out banknotes to be taken out of circulation, collect and dispose of, and instead print a new one. All this is quite an expensive process. Just recently, the NBU reported that for 5 months of 2019, the Bank has destroyed nearly 264 million worn bills.

However, the national Bank does not hide that the issue of new banknotes is still first and foremost a reaction to the cheapening of the hryvnia and inflation, what was once said of the skeptics. More precisely, the NBU notes that taking the decision to print banknotes new denomination, the bankers are guided by a number of factors, among them inflation, and the real value of the currency, and the size of salaries, and the amount of cash in circulation.

In this case the financiers are reminded that the last time before a new banknote of 500 hryvnia – has appeared already in 2006! After that, the hryvnia had a lot of trouble, particularly over time relative to the US dollar, it fell 5 times. But despite all this Ukraine all this time there were no new bills.

So do not rush directly link inflation and the issue of new banknotes.

The Executive Director of the Economic discussion club Oleg Pendzin General said that Ukraine is not even “dragged” with the introduction of new banknotes in circulation: one denomination UAH 500, they say, is not enough – this is around 15 Euro. The expert also noted that inflation should not wait, as it is influenced by the amount of money in the country.

No need to panic

Agree with him and another financial expert – the President of the Ukrainian analytical center Alexander Okhrimenko. He notes that inflation is much more dependent on the release of the cash rate, which is in the hands not hold, than of the new banknotes.

At the same time it is obvious that bills of a new denomination would be an easy stress for Ukrainians.

If the financiers used to do the analysis and predictions starting from data such as the refinancing rate of the NBU, then for the layman such complex financial indicators are of little interest and nothing in fact not say. (However, the Finance experts may interpret the same data quite differently).

But the new bill, that’s a signal that no one will leave without attention. As “transformation” from 1 to 5 hryvnia coins. “That is me now in my wallet you can keep 1,000 hryvnia, one bill, and 5 hryvnia – this is like a “trifle”?”, – probably many will think.

Economic expert Andriy Novak believes that such reflections could lead to pessimistic moods of Ukrainians and subsequently wish to exchange the hryvnia for dollars or euros. And this in turn will cause an increase in the exchange rate.

Other negative effects can be problems with the acceptance of the new banknotes in the terminals or at the box office and the interest of counterfeiters – 1000 hryvnia “beneficial” to forge unlike bills of smaller denomination.

But the NBU says that with the new banknote counterfeiters fine, and the difficulties of reception are likely to be only temporary.

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