The European Commission has adopted its proposal for a Council recommendation on the conversion of Ukrainian hryvnia banknotes into the currency of host Member States by displaced persons fleeing the war in Ukraine. This proposal complements the humanitarian aid provided by the EU to people fleeing Ukraine, in particular when traveling throughout the Union, and is fully in line with the EU asylum acquis and the Union’s external action.
Since the beginning of the Russian military invasion of Ukraine, more than 3.8 million people have fled the war in Ukraine to the European Union. The EU and its Member States have made significant efforts to provide humanitarian assistance and temporary protection to these people, including access to the labor market, housing, medical care and education for children. One of the immediate needs of refugees is to convert Ukrainian hryvnia banknotes into the currency of the host country.
The aim of today’s proposal is to promote a coordinated approach for all Member States in order to provide persons fleeing Ukraine with a level playing field for the conversion of Ukrainian hryvnia banknotes into local currency, regardless of the Member State in which those persons were admitted. This approach was necessary in view of the fact that the National Bank of Ukraine had to stop the exchange of Ukrainian hryvnia banknotes in foreign currency in order to protect Ukraine’s limited foreign exchange reserves. As a result, credit institutions in the EU Member States have shown a reluctance to make exchanges due to the limited convertibility of Ukrainian hryvnia banknotes and currency risk exposure. Some Member States are considering the introduction of national schemes to support the conversion of a limited number of Ukrainian hryvnia per person, and the Commission’s aim is to promote a coherent approach to such schemes. The schemes should provide for a maximum limit of 10,000 Ukrainian hryvnia per person free of charge at the official exchange rate published by the National Bank of Ukraine. The duration of the schemes should be at least three months.
