The head of the National Bank of Ukraine Yakov Smoliy announced the release into circulation of coins with denominations of 5 and 10 hryvnias. New “noses” may appear already this year, metal of “gold coins” – not earlier than next year. Specific terms, the NBU is not called, promising to inform the Ukrainians for a few months before the launch. Like last year, releasing the coins in denominations of 1 and 2 hryvnia, the national Bank explains its decision by a longer service life compared to paper bills that wear out quickly. According to the regulator of this step will allow the state to save about a billion UAH. In the future, the now widely used us banknotes 1, 2, 5 and 10 hryvnia will be produced in small quantities exclusively for collectors. But in NBU promise not to create inconvenience to citizens, forcibly withdrawing from circulation of banknotes of small denominations. They will remain legal tender indefinitely, until by the gradual cessation of their release. Convenience and comfort As commented in the National Bank, the new coins will provide optimal, comfort and convenience of cash settlement. They are small in size, light and will not burden the wallets of Ukrainians. The coins are made from economical way – from steel with a galvanic covering. Sketches of the coins already published on the website of the NBU.
According to the regulator, the release of new coins due to the current needs of the state and economy, as well as international experience. For example, in international practice, the nominal series have an average of 12 denominations of banknotes. Also in NBU reminded that the share of cashless payments in Ukraine using payment cards over the past five years has more than tripled – to 44.3% from 12.4%. That is, due to the active development of cashless payments, the Ukrainians can do more to pay with payment cards. Looking after inflation Historically, the issue of new money raises the Ukrainians strongly associated with rising prices. But experts do not expect a significant impact of the issue of new coins at the rate of consumer inflation in Ukraine to 2018 – the first time in five years dropped to below 10%. Chief economist of Alfa-Bank (Ukraine) Oleksiy Blinov recalled that last year’s release of new coins in denominations of 1 hryvnia and 2 had no impact on consumer prices, and predicted that the upcoming release also will not provoke their acceleration. “The issue of coins instead of banknotes is not a money issue. In Ukraine the share of cash in the economy in recent years actively reduced. In 2013, the ratio of cash in circulation to GDP was 16%, now 10%. The main reason is development of cashless payments”, – explained the expert. Deputy Executive Director of the Center for economic strategy Maria Repko also believes that the substitution of paper money for metal should not have a significant impact on inflation. “First, the national Bank monitors the indicators of the money supply in circulation and balances the coins with banknotes. Therefore, when releasing coins, the national Bank may withdraw paper money in the same amount and the total amount of cash in circulation will not grow. Second, the ratio of money supply in Ukraine to GDP is currently low if compared with the indicators of previous periods and of Eastern Europe,” she explains.
According to experts, given the decline of inflation in Ukraine, the further weakening of inflationary risks from the policy, exchange rate and prices of basic commodities, it is possible to expect easing of monetary policy that involves increasing money supply in circulation. In simple words, the Ukrainians should not be afraid of release of new coins, as chosen by the National Bank tactic of gradual replacement bills will make the process hardly noticeable. Perhaps the increased use of coins will lead to a more active development of a network of vending machines and will provide new opportunities for domestic buyers. But when the banknotes in your wallet turn into barely noticeable on the palm of the coin, it is sad to know how “crushed” the hryvnia in recent years.