What is the UAH (Ukraine Hryvnia)
Ukraine Hryvnia (UAH) is at times written as hryvnya and is the national currency for Ukraine except for Crimea. The hryvnia comprises 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 euro and the yen because they symbolize stability. The money derives its name from a unit of weight used in the Slavic region during medieval times.
BREAKING DOWN UAH (Ukraine Hryvnia)
In 1996, after the collapse of the Soviet Union, the Ukraine Hryvnia (UAH) became the national currency of Ukraine, except in the region of Crimea which uses the rouble. 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 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. The hyperinflation that occurred in the 1990s as a result of the collapse of the Soviet Union caused massive devaluation of the older banknotes. 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).
Economic Outlook for the Ukraine Hryvnia
The Ukrainian economy was one of the largest of the Soviet Bloc and was an important industrial and agricultural region. However, the move to a market economy has the nation struggling. Much of the population turned to subsistence farming. The barter system allowed the people to purchase daily necessities. Government oversight and the issue of the UAH currency has improved the situation 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.
As of 2018, the currency continues devaluation against the U.S. dollar. However, according to the Ukrainian Independent Information Agency (UNIAN), the hryvnia 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, needed to do more to support Ukraine's 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 2017 World Bank data Ukraine experiences only a 2.5% gross domestic product (GDP) annual growth and has a 22.1% annual inflation deflator.