The National Bank of Ukraine together with the National Bank of Poland became winners of the international Central Banking Awards in the Currency Manager nomination. The award in this nomination is mainly given to central banks for achievements in the management of cash flow.
So this year at the same time with recognition of the National Bank of Ukraine as the central bank of the year and with the award for the initiative in the field of payment and market infrastructure, the judging panel of the Central Banking Awards also appreciated the joint efforts of the Ukrainian and Polish central banks to develop a mechanism for the emergency exchange of hryvnia cash into local currency for Ukrainian citizens who were forced to leave their homes and escape from war abroad.
“This award from Central Banking emphasizes the focus of the National Bank of Ukraine on the protection of Ukrainian citizens in cooperation with foreign partners. We could not leave millions of our people, mostly women and children, who had to leave their homes due to security risks, to fend for themselves in extremely difficult conditions. Having with them a minimum of things and only a hastily taken cash hryvnia, they were faced with the impossibility of exchanging it at a fair rate for the local currency. That’s why we immediately started looking for mechanisms to solve this problem,” commented Deputy Chairman of the National Bank of Ukraine Serhii Nikolaychuk.
Understanding the complexity of the situation, the National Bank of Ukraine in the first days of the full-scale war started communication with the central banks of the neighboring countries that accepted the Ukrainian immigrants, in order to find a mechanism to exchange the hryvnia for the local currency. At the same time, the first priority was to conclude an exchange agreement with the National Bank of Poland, because it was to this country that most Ukrainians left. According to UN data, during the first month of the full-scale war, about 3.5 million citizens crossed the Ukrainian border, in particular, about 2 million Ukrainians left for Poland.
As a result, within a month of the beginning of the full-scale invasion of the National Bank of Ukraine together with the National Bank of Poland succeeded in launching the exchange of cash hryvnias for zlotys in Poland.
“This was the first such agreement between the NBU and a foreign central bank. We are extremely grateful to our Polish colleagues for this partnership, for the support and humanity shown to Ukrainian refugees forced to save their lives because of the war. Thanks to our joint efforts, they were able to meet their life needs. In addition, the result of our partnership with the National Bank of Poland was the unprecedented scale of the hryvnia cash exchange program, implemented together with nine other central banks of European countries, and precisely at the time when it was most in demand,” Serhiy Nikolaychuk said.
After the conclusion of the agreement between the National Banks of Ukraine and Poland, thanks to the significant attention of the EU institutions to the existing problem, the Council of the EU recommended the EU member states to introduce a national mechanism to facilitate the exchange of Ukrainian hryvnia banknotes for local currencies. It was about the possibility of one-time conversion of up to 10,000 hryvnias per person. The details of the agreements were worked out separately with each partner central bank, but the agreement model developed by the European Central Bank based on previously reached agreements between the central banks of Ukraine and Poland was taken as a basis.
As a result, the National Bank of Ukraine gradually managed to conclude nine more agreements and launch the exchange of hryvnia cash in Germany, Sweden, Switzerland, Lithuania, the Netherlands, Belgium, Latvia, Italy and Malta.
During 2022, under these programs, forced migrants abroad exchanged about 1 billion hryvnias. This amount turned out to be much smaller than generally envisaged by the respective agreements with the central banks. After all, during the year, Ukrainians became convinced of the uninterrupted operation of the Ukrainian banking system and relied less and less on cash, preferring cashless payments.
For reference
The English publishing house Central Banking was founded in 1990. In particular, it takes care of the publication of the eponymous profile magazine for central bankers, which is read by employees of more than a hundred central banks of the world, as well as the annual Central Banking Awards.
The Central Banking Awards consists of 26 nominations, 13 of which celebrate successful cases and achievements of the world’s central banks, and the other 13 – financial market participants.
Two years ago, in 2021, the National Bank of Ukraine already received this international Central Banking Awards in the Currency Manager nomination – for the large-scale optimization of the banknote and coin series of the hryvnia and the modernization of the national currency, carried out during 2014–2020 in Ukraine.
According to the results of this year’s Central Banking Awards, the National Bank of Ukraine also won in the nominations “Central Bank of the Year” and “Initiative in the field of payment and market infrastructure”.
