The introduction of the 2,000-hryvnia banknote does not mean an increase in the money supply, turning on the “printing press,” or a future spike in prices. The new denomination is an adjustment of the cash circulation to the growth in incomes, prices, and the volume of cash that has already taken place.
Serhiy Mamedov, vice president of the Association of Ukrainian Banks and chairman of the board of GLOBUS BANK, discussed this in a new podcast on the Finance.ua YouTube channel.
“Two 1,000-hryvnia bills and one 2,000-hryvnia bill amount to the same sum of money. The number of bills has changed, but the amount of money has not. The introduction of a new denomination and an increase in the money supply are two different processes,” the banker emphasized.
According to him, the risk of inflation arises when the amount of money in the economy grows excessively relative to the volume of goods and services. The number printed on the banknote itself does not create additional money and cannot automatically accelerate inflation.
The head of GLOBUS BANK noted that, in terms of its foreign currency equivalent, the new bill is not abnormally large. In 1996, a 100-hryvnia bill was worth approximately 57 dollars at the exchange rate at the time. A 1,000-hryvnia bill in 2019 is worth about 40 dollars. A 2,000-hryvnia banknote, at a hypothetical exchange rate of 45 hryvnias to the dollar, would be worth slightly more than 44 dollars.
“The new highest denomination is, in fact, returning to the historically familiar range—around 40 to 60 dollars. Therefore, 2,000 hryvnias is not a random figure, but a logical continuation of the banknote series,” the expert explained.
He noted that the National Bank attributes the need for the new banknote to changes that occurred after the introduction of the 1,000-hryvnia note. Over the past seven years, the average monthly salary in Ukraine has roughly tripled, while the general price level has doubled.
The volume of cash in circulation increased from nearly 390 billion hryvnias in 2019 to over 970 billion hryvnias as of July 1, 2026. At the same time, 1,000-hryvnia banknotes already account for more than 55% of the total cash supply by value.
“When more than half of the total cash supply consists of a single denomination—the largest one—it means that it is operating nearly at the limit of its functionality. The economy has effectively outgrown the banknote series established seven years ago,” the expert noted.
Another argument, according to the banker, is the reduction in cash handling costs. To provide the same total amount, it takes half as many 2,000-hryvnia notes as it does 1,000-hryvnia notes. This reduces costs related to production, transportation, collection, transfer, storage, and disposal of worn-out banknotes.
He noted that despite the rapid growth of cashless payments, cash remains an important part of the financial system. During power outages, communication disruptions, or problems with the payment infrastructure, cash serves as a backup means of payment.
According to him, the stability of the hryvnia will depend not on the denomination of the largest banknote, but on the inflation rate, the state of the economy, budget balance, the regularity of international aid, the volume of foreign exchange reserves, and the effectiveness of the NBU’s monetary policy.
“The 2,000-hryvnia banknote is not the cause of inflation. It is a consequence of economic changes that have already taken place. This is a technically and economically sound decision that should make cash circulation cheaper, more convenient, and more stable,” Serhiy Mamedov concluded.
