News Brief: Statement by IMF Managing Director on Ukraine

IMF News, September 13, 1996

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Ukraine introduced a new currency, the hryvnia.
All monetary holdings in the former currency, the karbovanets, will be converted into hryvnia at a single rate of conversion: Krb 100,000 for one hryvnia.
During the period September 2-September 16, the karbovanets and the hryvnia were allowed to circulate in parallel.
Beyond this period, the hryvnia will be Ukraine's sole legal tender.
The Government expressed satisfaction about the pace of conversion of monetary holdings.

Certain administrative restrictions introduced in the context of the currency conversion have been lifted.
A price freeze that was introduced on September 2 has been canceled by the Government.
Restrictions on the use of foreign currency accounts have been lifted.

The IMF Management welcomes the introduction of the hryvnia and the continued commitment of the Ukrainian authorities to the program supported by a stand-by arrangement with the IMF.
The sound financial policies pursued by Ukraine so far in 1996 have helped reduce inflation and stabilize the exchange rate.
Structural reforms undertaken as part of the program, in particular privatization of state enterprises, have helped pave the way toward the recovery of the economy.
The informal sector of the economy is already growing rapidly.

On May 10, 1996, the IMF approved a stand-by arrangement with Ukraine in an amount equivalent to SDR 598.2 million (about US$864 million).
Under the present arrangement, Ukraine has made five purchases for a total of SDR 335 million (about US$484 million).

IMF EXTERNAL RELATIONS DEPARTMENT, Public Affairs, Media Relations.