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EU to Facilitate the Exchange of Hryvnia Banknotes for Ukrainian Refugees

Categories : Cash and Crises, Cash is a contingency and fall-back solution
May 6, 2022
Tags : Cash and Crises, Europe, Social Inclusion, Ukraine
A groundbreaking EU Council Recommendation calls on member states to allow displaced persons from Ukraine to convert up to 10,000 Hryvnias per person, without charge, at the official exchange rate published by the National Bank of Ukraine.
Guillaume Lepecq

Chair, CashEssentials

This post is also available in: Spanish

Since the beginning of the Russian invasion of Ukraine, millions of Ukrainians have arrived in the European Union. Many have emptied their bank accounts before fleeing. Refugees pay exorbitant rates to exchange their money, up to 90% higher than before the war, or face flat refusals. “Crossing the border from Ukraine into Poland at Zosin, there was a lot of help on offer — free food, free diapers,” one Ukrainian refugee told POLITICO. “But nobody [is] willing to exchange cash.” The National Bank of Ukraine (NBU) has suspended the exchange of hryvnias (UAH) into foreign currency to protect the country’s foreign exchange reserves.

One month after the launch of the attack, the Financial Times reported significant increases in cash in circulation in neighbouring countries, including Poland,  Lithuania, Estonia, Latvia, Finland, Slovakia, and Hungary. Swedbank’s head of forecasting Andreas Wallstrom told the F.T. that cash withdrawals had reached the highest levels in three years.

On March 18, the National Bank of Poland (NBP) and its Ukrainian counterpart signed an agreement to enable each adult refugee to exchange up to UAH10,000 at the official exchange rate.

E.U. member states, the European Commission, and the ECB have been exploring how to support the Ukrainian central bank since the beginning of the crisis. On 19 April 2022, the Council of the European Union recommended that the Member States of the European Union should establish a national scheme to facilitate the conversion of hryvnia banknotes into its national currency by displaced persons, without charges, for an amount of UAH10,000 (€324.66) per person, at the official exchange rate published by the NBU. The NBU fixed the foreign exchange rates on 24 February under the martial law regime. As of May 5, €1 is worth UAH30.801.

The Recommendation encourages the Member States to make the best use of a network of credit institutions to implement the exchange scheme. It adds that Member States should envisage agreeing with the NBU on the modalities for future exchange of hryvnia banknotes.

Ukraine experienced a run for cash following the Russian invasion. Under martial law, the NBU lifted requirements to provide source verification documents from banks, namely about cash withdrawals from own accounts and purchase of investment metals when taking currency or valuables abroad. Before the decision, individuals had to provide such documents when taking abroad currency valuables for €10,000 (in equivalent).


This post is also available in: Spanish