The national Bank has dispelled myths about 1000 hryvnia banknote

Нацбанк развеял мифы о 1000-гривневой банкноте

The National Bank of Ukraine assured that the introduction into circulation of a banknote face value of 1000 UAH will not affect the national currency and will not lead to higher prices. Appropriate statements of the NBU are called myths and disprove them.

In NBU declared that the release of 1000 hryvnia banknotes is associated with a reduction in the purchasing power of the national currency. However, urged citizens not to confuse cause and effect: the new banknote is introduced because of inflation, but can not provoke her. The national Bank reminded that the banknote of 500 hryvnia was introduced into circulation 13 years ago.

“Since the income of the population increased substantially (say, the average salary has increased almost 10 times, according to state statistics). A corresponding increase in demand led to higher prices (although peaks after 2015 due to the monetary policy of the NBU, inflation kept in single digits and is committed to our goal of 5%)”, – explained in the press service of the regulator.

In connection with the growth of nominal incomes and declining purchasing power of the hryvnia over the years the introduction of high denomination banknotes should facilitate cash transactions.

The national Bank also stressed that the 1,000-hryvnia banknote has nothing to do with the level value of the hryvnia relative to other currencies.

“The exchange rate of the hryvnia is not determined by nominal close of banknotes and coins and foreign currency supply and demand in the foreign exchange market. A parallel between the devaluation of the hryvnia and the emergence of new high-value hryvnia baseless,” the statement reads.

Also the issue of banknotes of new denominations is not so-called “running the printing press”. and the amount of money in the economy after the introduction of 1,000-hryvnia banknotes will not increase. Simply, they will gradually replace the circulation of the cash in denominations of 500, 200 and 100 UAH.

“In today’s world hryvnia emission is carried out only in cashless form. To issue the national currency, the NBU can only purchase currency when making currency interventions on the interbank market, loans refinancing or purchase of securities”, – said the press service of the regulator.