When Ukraine can peg the hryvnia to the euro: 5 conditions for the transition
20 January 12:39
Under favorable military and economic circumstances, the pegging of the hryvnia to the euro as the main foreign currency may occur no earlier than 2028. This opinion was expressed by Serhiy Mamedov, vice president of the Association of Ukrainian Banks, chairman of the board of Globus Bank, on the air of the Suspilne TV channel, Komersant ukrainskyi reports.
At the same time, the expert believes that this is an “ideal” scenario, the realization of which will require compliance with at least 5 basic requirements.
First, the number of export-import transactions in euros should significantly outweigh similar indicators in other currencies, in particular in US dollars.
Secondly, Ukraine’s progress towards the EU should not be just declarative, but should include maximum integration of all state processes, economy, and legislation into the norms and principles of the European community.
Third, peace must come to Ukraine with clear security guarantees that will prevent any future encroachment by the aggressor country on Ukrainian statehood.
Fourth, attracting powerful European investments in the post-war recovery and development of the country.
Fifthly, Ukraine must comply with the fundamental democratic principles and postulates of the EU, such as freedom of speech, transparency of elections, fight against corruption, etc.
“The transition to the euro should not be seen as a panacea. And it certainly does not mean giving up the hryvnia. So, citizens should not be nervous about buying euros. This will be a completely natural and economically sound process, which citizens will be informed about in advance: at the stage of budget planning for the coming year. For the time being, there will be no abandonment of the US dollar as the exchange rate currency. However, Ukraine declares a strategic goal, a vector of development, the implementation of which coincides with the strategic goal of becoming a full member of the European Union,” summarized Sergiy Mamedov.
The representative of the financial institution clarified that the euro will replace the dollar as the exchange rate currency in Ukraine. However, there will be no abrupt transition – the National Bank promises that everything will happen slowly and imperceptibly. The reason is the war in Ukraine, which is making its own adjustments. After all, this is not the best time to change monetary policy.
Nevertheless, the change of the exchange rate currency in Ukraine will take place, although this process will be extended in time.