The NBU explained the reasons for this decision, and economists clarified what it indicates about the state of the economy.
2000 thousand hryvnias / © Andriy Pyshny / Facebook
A new banknote with a denomination of 2000 hryvnias will be introduced into circulation in Ukraine on September 4. The National Bank assures that this does not mean additional money printing and will not lead to a new wave of inflation.
This is reported by “Telegraf”.
The head of the National Bank, Andriy Pyshny, announced that the 2000 hryvnia banknote will begin to enter circulation from September 4. It will gradually replace worn-out banknotes and will be used for cash withdrawals.
“The introduction of the new 2000 hryvnia banknote does not signify additional money issuance and will not impact inflation,” Pyshny emphasized.
According to him, the new denomination will also help reduce the costs associated with transporting, storing, and servicing cash.
Does the new banknote signify new inflation?
Financial analyst Andriy Shevchyshyn explains that the mere appearance of a new banknote cannot cause an increase in the prices of goods or services.
“Of course, the banknote itself does not affect inflation, but its introduction is a reflection of the actual inflation in the country,” the expert noted.
He stated that the need for a higher denomination banknote arose because the hryvnia has lost some of its purchasing power in recent years.
Why the need for the largest denomination arose
The economist reminds that since the end of 2021, official inflation in Ukraine has exceeded 70%, and the hryvnia has significantly depreciated against the dollar and the euro.
“The 2000 UAH note is a reflection of real inflation and the need for larger denominations. Would it be needed if inflation had remained at the 5% level for many years? Probably not,” Shevchyshyn explained.
He also pointed out that small coins are playing an increasingly minor role, as it is almost impossible to buy any item for one hryvnia today.
Experts emphasize that Ukrainians should not perceive the introduction of the 2000 hryvnia banknote as a signal of inevitable price increases.
The National Bank stresses that the new banknote will not increase the amount of money in the economy but will merely make cash circulation more convenient and cheaper to service.
At the same time, economists note that the emergence of the largest denomination is a kind of reflection of economic reality – a consequence of inflation and the decrease in the purchasing power of the hryvnia that have already occurred in recent years.
We remind you that a new banknote with a denomination of 2000 hryvnias will be introduced into circulation in Ukraine. It features the sixtieth-era poet Vasyl Stus. The banknote is in violet-blue and pink tones and contains over 20 security elements, including the unique animated Anima Colour ribbon. On the reverse is the building of the Philological Faculty of Donetsk University. The date of introduction is the day of Stus’s remembrance.
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