An analyst explained whether Ukraine needs a 5,000-hryvnia bill
It is unlikely that a 5,000-hryvnia banknote will need to be introduced into circulation in Ukraine in the coming years. According to the expert, current inflation rates do not create a need for a higher-denomination bill.
The analyst noted that the issue of introducing a 5,000-hryvnia banknote could become relevant only in the event of a significant rise in prices and a corresponding change in the money supply.
A 5,000-hryvnia banknote is not needed at this time.
New denominations become necessary due to a decline in the purchasing power of money.
The need for a banknote exceeding 2,000 hryvnias will arise in the event of a significant devaluation of the hryvnia.
The recent introduction of the 2,000-hryvnia note does not indicate runaway inflation.
The financial analyst does not expect a 5,000-hryvnia bill to be introduced in the coming years. He considers such a scenario premature given the current economic situation.
“It’s premature. I don’t think inflation will rise fast enough for 5 hryvnias to become as worthless to us as a single kopeck was back when the 100-hryvnia bill was the highest denomination,” Shevchyshyn said.
According to him, the need for larger denominations is directly linked to the decline in the purchasing power of money.
“When 2 hryvnias cease to be a means of payment, that is when the need for a denomination greater than 2,000 hryvnias will arise,” the analyst explained.
Shevchyshyn noted that over time, small denominations lose their practical significance if their purchasing power becomes too low.
“When we had a 100-hryvnia bill, a kopeck had a certain value and purchasing power. But now, a single kopeck is worth nothing,” he noted.
At the same time, the introduction of the 2,000-hryvnia bill, according to the analyst, does not mean an automatic transition to even higher denominations. For that to happen, the hryvnia would have to lose a significant amount of its purchasing power.
Financial analyst Andriy Shevchyshyn made this statement in a comment to RBC-Ukraine.
The NBU announced the launch date for the new 2,000-hryvnia banknote.
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