Turning the pages back... September 2, 1996 (08/29/04)

Turning the pages back...

September 2, 1996

Eight years ago, on Monday morning, September 2, 1996, the hryvnia, Ukraine's new national currency, debuted on the streets of Kyiv. Our Kyiv Press Bureau correspondent at that time, Marta Kolomayets, wrote that "on this first day of the long-awaited monetary reform, many residents combed the city looking for open banks and currency exchanges to trade in their old karbovantsi for the new, multi-colored bills."

She further reported on the scene in Kyiv:

"Although pensions and wages were paid out to senior citizens and state sector employees in crisp new hryvni and shiny kopiyky (coins) on Monday morning, workers in the private sector, tourists and foreigners waited in long lines to change karbovantsi and dollars into the new currency.

"There was no sense of panic on the streets, but long lines formed at the post office, where pensioners first lined up to collect their measly monthly allotment (the average pension is a little over 4 million karbovantsi, or 40 hryvni, which amounts to less than $25 per month) and then lined up at another window to trade in their karbovantsi (also known as coupons) for new hryvni.

" 'I've been here for three hours,' said Olha Paziak, 65, a retired teacher of Ukrainian language at Kyiv State University, who strolled around the post office, waiting to collect her pension. 'Although the government has assured us that we won't be cheated with this monetary reform, why take a chance,' she said as she waited for her husband to exchange their life's savings of 50 million karbovantsi to 500 hryvni, which is less than $300.

" 'Oohh, they are nice,' she exclaimed as her husband brought a stack of new bills for her to examine. 'And they feel like real money, not just plain paper,' she said."

The new currency, in effect, slashed five zeroes off the karbovanets and ended an era when every Ukrainian could jokingly call himself a millionaire.

The hryvni bore the portraits of historical leaders - Prince Volodymyr the Great and Hetman Bohdan Khmelnytsky appeared on the 1 hrv and 5 hrv notes, respectively, while the bard of Ukraine, Taras Shevchenko, was depicted on the 100 hrv bills.

Several banks and most currency exchanges were closed on September 2. Some were awaiting the delivery of the new hryvni, while others had been closed down by the National Bank of Ukraine for speculating on the karbovanets and sharply inflating the dollar rate of exchange in the last days before the reform was introduced. Many stores also remained closed on Monday as merchants spent working hours posting the new hryvnia prices alongside the old karbovanets signs.

Although there seemed to be a shortage of hryvni available to all who wanted to exchange karbovantsi and dollars, Vice Prime Minister Viktor Pynzenyk said that in a few days, practically all regions in the country would receive sufficient amounts of hryvnia notes and store customers would soon be getting their change in hryvni, not karbovantsi. The chairman of the National Bank of Ukraine (NBU), Viktor Yushchenko, said he expected the hryvnia circulation to exceed that of the karbovanets by September 8-9.

Source: "Stable hryvnia greets introduction of monetary reform in Ukraine," by Marta Kolomayets, The Ukrainian Weekly, September 8, 1996, Vol. LXIV, No. 36.

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