From 19 April, EU member states will allow Ukrainian refugees to swap Hryvnia notes for Euros at the official exchange rate of the National Bank of Ukraine, according to a recommendation approved on 13 April by the Committee of Permanent Representatives.
Before the war, Ukraine’s currency, the Hryvnia, was restricted, meaning that banks and currency exchanges did not carry or exchange these types of notes. Upon the outbreak of war, Ukraine attempted to keep foreign currency within the country and suspended the Hryvnia's sale at all currency exchanges.
This proved extremely problematic once the war started. Ukrainians fleeing the country, especially areas hit hard by the war, often did not have time to deposit their cash into their bank accounts.
Many fled with all their savings in cash, quickly discovering that the notes were nearly worthless in Europe.
The National Bank of Ukraine recommends that Ukrainians deposit cash into their bank accounts. Ukrainian bank customers now have access to a wide array of payment platforms, such as SWIFT transfers, PayPal, TransferWise, and more.
Hryvnia holds its value, loses its worth
Before now, only certain European banks had made arrangements to offer services to Ukrainian refugees with Hryvnias banknotes. Banks have been reluctant to trade the currency due to the note's limited convertibility and value.
States bordering Ukraine have already created arrangements to allow Ukrainians to exchange local currency.
In Poland, PKO Bank Polski allows up to UAH 10,000 (€314) to be exchanged to Polish Zloty. In Hungary, OTP Bank allows for the exchange of UAH 15,000 (€471) to Hungarian Forints. In Romania, Banca Comercială Română can purchase 1,000 Romanian Lei with Hryvnia. In Slovakia, Ukrainians can buy €250 per day in Hryvnia with Austrian bank Raiffeisen.
In Western Europe, only Austria allows for the exchange of notes up to €500 per day, and only in certain branches.
The new common policy will allow the one off exchange of up to UAH 10,000 (€314) across all member states, without fees. This is not a large amount, but will allow for many Ukrainians to get hold of important local currency whilst waiting for government support.
Both adults and children will be eligible to exchange Ukrainian Hryvnia at market rates.
According to the press release from the European Council, the decision would protect Ukrainians from exploitation and ensure equality.
“The proposal had the aim of offering displaced persons from Ukraine the same conditions for converting Hryvnia banknotes into local currency independently of the member state that hosts them,” the statement explained.
It is now hoped that the move will provide a “level playing field for credit institutions and prevent speculative behaviour on the market.”
