12:05 15.03.2018

NBU to stop printing UAH 1, UAH 2, UAH 5, UAH 10 banknotes

2 min read
NBU to stop printing UAH 1, UAH 2, UAH 5, UAH 10 banknotes

The National Bank of Ukraine (NBU) intends to stop printing UAH 1, UAH 2, UAH 5, UAH 10 banknotes, acting NBU Governor Yakiv Smolii has said.

"UAH 1, UAH 2, UAH 5, UAH 10 banknotes will be in circulation synchronously with coins [of the same value] until the last banknote. The NBU would not withdraw UAH 1, UAH 2, UAH 5, UAH 10 banknotes, but the central bank would stop printing them and expand money supply with them," he said at a press conference in Kyiv on Wednesday.

Smolii said that the replacement of banknotes of lower denominations by coins suits practice of the EU member states where they have EUR 1 and EUR 2 coins.

He also said that the replacement of banknotes with coins of the corresponding denominations will save UAH 1 billion for the state, since the life expectancy of coins is much longer than the life of banknotes.

"Coins are circulating for about 20 years, and banknotes with denominations of UAH 1, 2, 5 and 10 can be handled in a small amount of time (on average about one year)," he said.

In addition, he said that this substitution stimulates the development of noncash payments.

"The development of cashless payments leads to a reduction in the number of denominations in the denomination ranks of the countries, and Ukraine is no exception. The share of noncash payments in Ukraine using payment cards has more than tripled over the past five years, to 39% at the beginning of 2018, from 12% at the beginning of 2013," Smolii said.

The acting NBU governor also said that UAH 1 and UAH 2 coins will be put into circulation on April 27, 2018, UAH 5 and 10 UAH coins will be introduced under a separate decision of the NBU.

The first issue of UAH 1 and 2 coins will be 5 million pieces of each denomination. They will be put into the market along with the withdrawal of the worn-out banknotes of the corresponding denominations.

According to the director of the department of monetary policy and economic analysis of the NBU, Serhiy Nikolaichuk, this replacement will not affect inflation.

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