What Is the Ukraine Hryvnia (UAH)?

The Ukraine hryvnia (UAH) (at times written as hryvnya) is the national currency for Ukraine, except for Crimea which uses the Russian ruble (RUB) since it was annexed by Russia in 2014.

The hryvnia can be subdivided into 100 kopiykas, the plural of kopiyka, represented with a symbol based on the cursive Ukrainian letter He, which looks like a backward 'S', with double horizontal middle strokes. The double strokes are seen on other currencies such as the U.S. dollar sign ($), euro, and the yen as well and they symbolize stability. The hyrvnia derives its name from a unit of weight used in the Slavic region during medieval times.

As of September 2020, 1 UAH is worth roughly U.S. $0.035.

Key Takeaways

  • The Ukraine hryvnia (UAH) is the official currency of Ukraine, first issued when the country gained independence from the U.S.S.R. in 1996.
  • However, the Russian ruble is instead used in annexed Crimea since 2014.
  • The Ukrainian economy has continued to suffer since its independence, with inflation eroding the value of the UAH over time.

Understanding the Ukraine Hryvnia

In 1996, after the collapse of the Soviet Union, the Ukraine hryvnia became the national currency of Ukraine. It is used throughout the country, except in the region of Crimea which uses the ruble after annexation by Russia in 2014.

An earlier currency called by the same name circulated in the region in 1917 after the area had declared its independence from the Russian Tsarists Empire. Between 1917 and 1920 karbovanets banknotes circulated in the Ukrainian People's Republic (UPR). The karbovanets, printed on ordinary paper, were easily counterfeited. During the occupation of the region through the two World Wars, a series of newer banknotes saw use until the second and third issues of a more secure karbovanets.

In 1996, the hryvnia replaced the karbovanets at a rate of 100,000 karbovanets to one hryvnia, due to a hyperinflation that occurred in the 1990s as a result of the collapse of the Soviet Union. This caused massive devaluation of the older banknotes, rendering them almost worthless. Initially, the currency was introduced at an exchange rate with the U.S. dollar of 1.76 Ukrainian hryvnias to one U.S. dollar (USD), but has since lost value where US $1 can buy almost 28 UAH as of 2020.

Economic Outlook for the Ukraine

The Ukrainian economy was once one of the largest of the Soviet Bloc, with important industrial and agricultural regions. However, the move to a market economy has seen the nation struggling. Much of the population has turned to subsistence farming where the barter system allowed the people to obtain daily necessities. Government oversight and the issue of the UAH currency has improved the situation only slightly. 

Just as Ukraine seemed to be getting its economic feet under her again, the 2008 financial crisis struck, and the country received a $16.5 billion International Monetary Fund (IMF) loan. By 2014 the UAH continued to lose value and was one of the worst performing currencies in the world. However, according to the Ukrainian Independent Information Agency (UNIAN), the hryvnia's outlook shows some strengthening against the USD. Ukraine still struggles with economic pressures from neighboring countries and internal conflicts, such as those with the Donbas region in eastern Ukraine. 

As reported by UNIAN, some feel the West, including the International Monetary Fund, has needed to do more to support Ukraine's democratic political system and economy, offering support and engagement to reform-minded politicians seeking to root out corrupt leaders. UNIAN quoted Anders Aslund, a senior fellow at the Atlantic Council as saying "Wealthy businessmen dominate the parliament, but even so, the parliament promulgates surprisingly reformist laws. He added that "unless the country receives IMF financing, it can hardly get through 2018 without a major depreciation of the Ukrainian hryvnia, which would be devastating in the 2019 elections. Politically, Ukraine needs Western support against Russian military aggression."

According to 2019 World Bank data Ukraine experienced 3.2% gross domestic product (GDP) annual growth and has a 7.9% annual inflation rate.