NBU to replace 1-10 UAH banknotes with coins
NBU will introduce coins of UAH 1 and 2 denomination in circulation for gradual banknotes replacement since April 27, UAH 5 and 10 since 2019
The NBU will introduce coins of UAH 1 and 2 denomination in circulation for gradual banknotes replacement since April 27, UAH 5 and 10 since 2019.
It was reported by the NBU's Deputy Governor Yakiv Smolii during the press conference.
He expalined that replacing banknotes with coins will provide the best balance of quality and quantity of banknotes and coins in circulation thus satisfying the current needs of the government and the economy and conforming to the global practices.
"Countries of the world have on average 12 denominations of the monetary unit. And we should strive to meet such criteria," he said.
Yakiv Smolii noted that about such replacement can save the state over UAH 1 billion considering the lifespan of coins.
Since coin lifespan by far exceeds that of banknotes.
Coins remain in circulation for about 20 years, when banknotes of UAH 1, 2, 5 and 10 denomination are in circulation only for a small period of time (on average, about one year).
"This decision is also fostered by the advancement of cashless settlements, change in hryvnia purchasing power for the last 20 years and changes in consumer behavior. Cashless settlements result in the decrease of the number of denominations. In this regard, Ukraine is no exception. The share of cashless operations in Ukraine using payment cards more than tripled over the past five years, up to 39% at the beginning of 2018 (from 12% as of early 2013)," he said.
Such a replacement on practice is performed gradually, it's' the reason why consumers are comfortable with it.
In general, the National Bank removes for about 800 million of bank-notes from circulation, about a half of which (more than 40%) are UAH 1-10 denominated banknotes.
Additionally, replacement of banknotes of low denomination with the coins helps Ukraine to align its practices with those in the European Union, where coins of EUR 1 and 2 denomination have been in circulation.
Similar undertakings were successfully implemented by Hungary, the Czech Republic, Denmark, Japan, Canada, the United Kingdom, Australia.
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