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How to strengthen trust of Ukrainians in hryvnia?

Author : Taras Kozak

The skepticism about their national currency is quite typical for countries which governments have long abused the monetary "printing press." Especially in the post-Soviet space
21:36, 7 August 2019

Open source

Ukrainians do not trust in the hryvnia. The skepticism about their national currency is quite typical for countries which governments have long abused the monetary "printing press." Especially in the post-Soviet space.

Many years ago I worked in a country that is not remembered with a kind word in a decent society. However, the process of growing confidence in the ruble is quite interesting and may be useful with us.

In the 1990s, Russia had the same distrust of the ruble as any hyper-devaluing currency. Even prices in grocery stores were written in dollars. This continued until the early 2000s, when the ruble stopped falling. Many years of stability, plus a variety of painful prohibitions by the government to indicate prices in dollars and all kinds of currency have done their job.

At first, bans were bypassed traditionally - by bribes to inspection bodies. However, over time, it became unprofitable to pay bribes, and the sellers obeyed. Car dealerships and developers began to write exclusively ruble prices for cars and apartments on price tags and in advertisements.

Related: National Bank lifts restrictions on currency purchasing for credit funds


When the ruble began to grow smoothly in the mid-2000s, workers began to massively refuse to tie wages to foreign currencies. For the same reason, they refused to make payments in dollars when renting apartments, and in loans, and in other relations between citizens.

When household income and basic expenses began to be measured exclusively in rubles, they began to recall less often the dollar exchange rate. Businesses and citizens stopped converting large incomes into this currency, realizing that they were losing on course and commissions.

In parallel, the local regulator put things in order in the banking market. Back in the early 2000s, it cleaned out various garbage dumps and pyramids. Therefore, confidence in banks grew, and they offered much more favorable conditions for deposits in rubles.

Undoubtedly, the responsible behavior of the central bank has become the most important factor in increasing confidence in the ruble. It stopped printing unsecured money and lending to the government even in times of crisis. Even in such a dictatorial country.

For such a tough positioning, the central bank of the country must have unquestioned authority and trust both among ordinary citizens and other state authorities.

Related: Government loans and hryvnia exchange rate: What's wrong with Ukraine's National Bank

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