Hryvnia has been demonstrating stable  course recently. Experts agree that it is the merit of the well-thought-out and balanced policy of the National Bank. In tan interview with ForUm deputy NBU governor Vera Rychakovska spoke about money turnover in Ukraine, structure of the money stock, hryvnia's emission, its design and protection system, as well as about attraction of money of individuals into the banking system, investment and commemorative coins.

- Vera Ivanivna, tell us about the main tasks and solutions of the development of money turnover in the country.

Order of money turnover is one of the most important parts of the economic activity of any state. Analysis of the money turnover in various countries shows that the share of cash payments grows in the world. Thus, for 2009-2011 years cash turnover in the EU  countries grew by 10%, in US - by 16%, in Russia - by 49%, in Ukraine - by 22%.

Electronic payment instruments are considered as an alternative to cash in the future,  but as of today the share of cash payments is rather high and makes about 90%.

The main tasks for the future are improvement of the current money turnover system and creation of an optimal and effective system for provision of cash for economic needs of Ukraine.

- What is the amount and structure of the money stock of Ukraine as of today, including comparing to previous periods? And what does it show?

- By the end of March, 2013 the amount of the money stock made 800.9 billion hryvnias and increased by UAH 27.7 billion (3.6%) for the first quarter.

For the first quarter of 2013 the amount of cash in extra-bank circulation increased by UAH 2.8 billion or 1.4% up to 206.1 billion hryvnias. As of April 1, 2013, 56 banknotes and 226 coins were accounted for by every citizen of Ukraine. In the first quarter the cash share of the money stock showed moderate growth comparing to its non-cash share. As a result, the ratio of extra-bank cash in the structure of the money stock reduced by 0.6% and made 25.7% as of April 1, 2013 (against 26.3% at the year beginning). 

- Was there any emission of hryvnia in 2012? If yes, why? Some experts say emission of banknotes causes inflation growth.

- First of all, emission operations, including putting in and withdrawal from circulation, are core activities of the Central Bank. Emission operations are aimed at provision of certain amount of money in circulation, necessary for exchange of goods and services in the economy. The amount of emission is calculated with reference to estimated figures of economy development: GDP amount, inflation, parameters of the state budget, etc.

In Ukraine, as well as in the majority of countries, the amount of cash in circulation grows. As of beginning of 2013, the amount of cash turnover, including banknotes and coins, made UAH 222.8 billion.  In 2012 there were issued 13.2 billion hryvnias, which is UAH 3.7 billion more than in 2011 (UAH 9.5 bln in 2011, UAH 29.6 bln in 2010, UAH 30 bln in 2009, UAH 45.0 bln in 2008).

- And in 2013? Was there any emission in the first quarter of the year? Why?

- In the first quarter of 2013 there were issued UAH 2.4 billion against UAH 4.6 billion withdrawn from circulation in 2012. More that 95% of new banknotes are printed to replace worn banknotes.

- What measures are necessary to attract the money of the population to the financial system of the country? How may it influence the monetary system?

- In our opinion, the state should introduce various initiatives and confidence-building measures to regain people's trust, including development of cashless payments, expansion of the list of reliable investment instruments, etc.

Among such initiatives there is restriction on cash payments. Growth of non-cash payments will increase returns of financial resources to the banking system and will improve bank liquidity. In particular, extra-bank money will come to bank accounts, which will enable to grant credits at lower interest rate and will become a state resource to credit the economy, which in turn will stimulate the growth of GDP. Moreover, this initiative will make it possible to reduce the volume of foreign exchange transactions, thereby contributing to the reduction of dollarization of the economy, and can help reduce the shadow economy share, leading in turn to increased budget revenues.

- Mass media heatedly discuss such new instrument as investment coins. How successful is this sector?

- Within the period from January 2012 till March 2013, the National Bank of Ukraine sold 25.835 bullion coins worth 68.41 million UAH. Just in the first quarter of 2013 we sold 8.095 bullion coins worth 15.82 million UAH (2264 golden coins worth 14 million UAH, 5831 silver coins worth 1.82 million UAH), which is 16.2% of coins more than over the same period last year. Such amount of sales proves interest of population in that group of coin production, which is a reliable tool of saving money and investing.

The NBU conducts a transparent pricing policy on the purchase and sale of investment coins. Selling price for bullion coins are calculated with reference to the value of metal in a coin multiplied by premium size. Purchase price for bullion coins are calculated based on the value of metal in a coin, multiplied by face value of an investment coin.

Today the bullion coins are sold and repurchased by 38 authorized banks and all regional offices of the National Bank. Moreover, since May 2013, bullion coins are transferred to authorized banks (JSC"State Savings Bank of Ukraine", "Ukrgasbank", JSC "Ukreximbank", PJSC "Bank Forum", PJSC "VAB Bank", JSC "IMEKSBANK") without advance payment for sales to physical and legal entities at NBU sale prices.

- How important is the emission of commemorative coins?

- Coin is a symbol of national identity and rich source of information. Commemorative coins tell about important historical events, culture, sport, nature of Ukraine and are divided into relevant series: "Spirituals treasures of Ukraine", "Restoration of Ukrainian national identity", "Prominent figures of Ukraine", "Architectural monuments of Ukraine", "Ancient cities of Ukraine", "Glorious cities of Ukraine", "Flora and fauna", "Sport", "Traditional holidays of Ukraine", "Higher educational institutions of Ukraine", etc. 

The National Bank also issues coins, dedicated to international events, announced by the United Nations, in particular to problems of preservation of ecosystem of our planet - "Clean water - source of life", "International year of astronomy", "International year of forests", "World year of the bat".

Ukrainian numismatics has existed for less than 20 years, but has already become a noticeable page in the international and country history. For this period the National Bank has built won modern coin production, created the school of artists-designers, issued more than 550 coins, mastered new technologies of coining. 

This year issued coins commemorates such jubilees as the1000th anniversary of foundation of Lyadovski Svyato- Useknovenski rock monastery, the 200th anniversary of birthday of Semen Gulak-Artemovski (Ukrainian composer, opera singer, actor and author of the first Ukrainian opera "Zaporozhets za Dunayem) and the 150th anniversary of the opening night of this opera. Moreover, the NBU has issued the coin dedicated to the 150th anniversary of birthday of the world known scientist Vladimir Vernadski. 

- What are the principal landmarks in the history of modern hryvnia design?

- According to propositions presented by the Verkhovna Rada Commission on economic reforms and national economy, on December 10, 1991 the VR Presidium decreed to approve hryvnia as the monetary unit of Ukraine.

The designers of the first banknotes of 1992 included Ukrainian artist Vasyl Lopata and designer Borys Maksimov, who worked under supervision of then NBU governor Volodymyr Matviyenko. The first banknotes of 1992 worth 1, 2, 5, 10 and 20 hryvnias were produced by the "Canadian Banknote Company". Banknotes of 1994 were issued by "Thomas de la Rue" (Great Britain).

Since 1994 banknotes have been issued at Banknote factory of the banknote printing and minting works of the National bank of Ukraine, put into operation in 1994. The paper for banknotes is produced by the Banknote paper factory of the National Bank of Ukraine (city of Malin), set into operation in 1997.

As of today we have banknotes of the third generation - models of 2003-2007, developed by specialists of the National Bank. The design of Ukrainian banknotes presents almost all history and culture of our people. Symbolism of Ukrainian money is based on harmonious synthesis of ancient traditions and modern style. Monetary units present the state on the international arena and create its image. With its monetary unit - hryvnia- Ukrainian state actively asserts itself in the world. 

- Will the design change in the future and why?

- The world practice shows that central banks changes and improve designs of banknotes every 5-7 years. However, the terms depends on many factors, including soci0-political and technical-and-economic ones (development of new elements of protection, fraud threats, economic expedience of changes, etc.).

The National Bank of Ukraine continuously works on improvement of the design and protection of hryvnia banknotes.

- Ukraine used to issue commemorative banknotes. Tell us about it. Will the NBU keep issuing commemorative hryvnias?

- According to the articles33-35 of the law of Ukraine "On National Bank of Ukraine" and on the occasion of the 20th anniversary of NBU foundation, the Bank put in circulation commemorative banknotes worth 50 hryvnias of 2004 model. There is an inscription "NBU 20 years" on the front side of the banknote. Depending on the sight angle, the color of the inscription changes from gold to  green.

In accordance with the world practice, commemorative banknotes are issued in limited number in honor of some important events in a country as objects of collection. Commemorative banknotes can have own design (additional inscription, images, etc.) Considering the specifics of printing, commemorative banknotes are a rare product comparing to commemorative coins.

- What can you  tells us about modern security system of banknotes?

- The security system of banknotes of 2003-2007, which are now in circulation, is at the same level with the security system of euro banknotes of 2002. To complicate forgery, banknotes have new security features, like tinted paper, a light element of the watermark, protective fibers, magnetic ink, bar code, etc. The design of banknotes includes several characteristics, which held blind and visually impaired people to read the printing on them.

Moreover, banknotes of the third generation have security features, recognized by portable detectors and banknote counting machines, as well as screening machines.

You can find more information about security features of hryvnia on the official website of the National Bank -

- Do you plan on improvement of the protection level, and if yes, how?

-The National Bank of Ukraine continuously works on improvement of design and security features of banknotes. The development works depend on various factors: the circulation region, economic expediency, local mentality, level of fraud threats, etc. Only after complete analysis of these factors it is possible to determine what security system is optimal for every particular country.

- What technologies are used for the protection system, domestic or foreign?

- As of today, the National Bank of Ukraine has modern and extensive capabilities for the production of monetary units, both banknotes and coins. It concerns all stages of production - from production of special paper (Banknote paper factory) to printing on the modern equipment using certain security systems (Banknote factory of the banknote printing and minting works of the National bank of Ukraine).


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