Hryvnia - the currency of Ukraine: the history of origin and the current state of affairs

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Hryvnia is the national currency of Ukraine. However, few people know how it appeared, where its name came from and what it is in general. This knowledge gap needs to be filled.

Where did the word "hryvnia" come from?

The name of such a monetary unit as the hryvnia is consonant with the Sanskrit word, which means "back of the head". In history, you can find quite a few references to the fact that our ancestors wore golden hryvnias around their necks - round plates fastened together with wire. Often, these decorations were also used as payment for any goods or services. The very name "hryvnia" comes from these very hryvnias, used back in Kievan Rus. Since the founding of the Old Russian state, the hryvnia had three meanings: a measure of weight, a badge of distinction and a coin. The currency of Ukraine under the same name appeared already during the existence of the Ukrainian People's Republic (the beginning of the twentieth century).

The history of the hryvnia

Hryvnia is a monetary, accounting and weight unit of Kievan Rus. In Europe, it was called "brand". As mentioned above, over time, the decoration took on a different meaning, and becamematch the amount of valuable metal. Since an ingot of silver was composed of a certain number of coins, an account of its constituent banknotes arose. The hryvnia, as a result, became the main and only payment concept in Russia. Initially, the weight of the monetary unit, which would later be called the "currency of Ukraine", was the same. After the minting of ancient Russian gold coins and silver coins ceased due to the arrival of foreign coins, the main form of financial circulation in Kievan Rus began to be called the “monet hryvnia”. Already from the eleventh century, hexagonal hryvnias were in circulation, which weighed about 150 g and served as a unit of payment until the Tatar-Mongol yoke. In the thirteenth century, Novgorod silver bars began to be called rubles, and this word gradually replaced the hryvnia. It is believed that this is due to the fact that the latter was cut into several equal parts, which, by the way, gave the name to the new banknote. Since the fifteenth century, the hryvnia has ceased to be used as a means of payment, as the scale of the minting of rubles has significantly increased, which have since become fixed and have become the main unit in the monetary system.

"Revival" hryvnia in the twentieth century

The hryvnia, as the main currency of Ukraine, was introduced into circulation in 1996, on September 2. Prior to that, since 1990, it was added to the Soviet rubles on the territory of the Ukrainian SSR and was used as one-time cut-off coupons that were printed on A4 sheets.

Already since January 1992the government introduced the so-called coupons - temporary banknotes of Ukraine, which were denominated in rubles. They were called Karbovans.

The hryvnia as the official currency of Ukraine was introduced by a special decree of the President of Ukraine Leonid Kuchma on August 25, 1996. To exchange karbovanets for hryvnia, the exchange rate was needed. Ukraine, however, was not ready to print a huge amount of banknotes, so the first batch was issued in Canada.

Already in September 1996, the process of exchanging karbovanets-coupons for hryvnias began. The ratio was approximately the following: 100,000 karbovanets were equal to one hryvnia. Since then, only hryvnias have been issued in all banks of the country. The exchange procedure ended in 1998.

Denominations and symbols of banknotes

The symbol of the monetary unit in question is a Cyrillic letter with two horizontal lines, which symbolize stability. The official hryvnia abbreviation is only "UAH." All other options are considered erroneous. The hryvnia sign was proposed on 1 March 2004 and received the Unicode code U+20B4. In 1991, the Supreme Soviet of the Ukrainian SSR planned banknotes of the following denominations: 200, 100, 50, 25, 10, 5, 3, 1. Later, 3 and 25 were replaced by 2 and 20. Two reserve banknotes of 200 and 5 hryvnia were also provided. On February 12, 1996, the Presidium of the Verkhovna Rada of Ukraine supplemented the hryvnia denominations with another reserve banknote of 500 hryvnia, which was put into circulation in September 2006.

The exchange rate of the national currency of Ukraine

The hryvnia exchange rate against the dollar during the first two years after its introduction was approximately as follows: two hryvnias for one US dollar. After a severe crisis in 1998, the ratio fell rapidly to five and a half hryvnia. per dollar. Since 2005, the National Bank of Ukraine has maintained a stable fixed rate, but after July 2008 it became floating. Around the same time, the following exchange rates were established:

1. Ukrainian hryvnia to ruble: 4 rubles per hryvnia.

2. The exchange rate of the monetary unit of Ukraine against the euro was six to one.

3. Ukrainian hryvnia against the dollar: one to five.

In the spring of 2014, the hryvnia exchange rate against the US currency reached its all-time high: almost fifteen to one. But in relation to the Russian ruble, it fell slightly: now the hryvnia can be bought for three and a half rubles. The National Bank of Ukraine predicts the strengthening of the national currency against the dollar and the euro by the end of this year and promises to maintain the exchange rate no higher than twelve hryvnias per dollar.