In 1996, Ukraine introduced the hryvnya (UAH) as a new national currency. The greatest success in regards to the economy has been the stabilization of the national currency. The hyperinflation (10,000 percent) of the early 1990s has been reduced to less than 20 percent. However, the hryvnya continues to depreciate in value. This is caused by the Asian and Russian financial crises of the late 1990s on the one hand, and Ukraine's current financial uncertainties and instability on the other. The value of the currency stood at UAH1.8295:$1 in 1996, but by February 2000, the value had slipped to UAH5.59:$1. The hryvnya lost 75 percent of its value to the dollar in 1999 alone. The hryvnya was badly affected by a fuel crisis in July 1999, when gasoline prices doubled over 1 week after imports from Russia declined. Price inflation reached about 25 percent by the end of 1999. The country's currency reserves diminished, as a result of trying to prop up the hryvnya. In early 1999, reserves stood at $2.34 billion, and by mid-1999 were reduced to $860 million. In order to shore up the hryvnya, in September of the same year the government decreed that Ukrainian banks had to keep at least 75 percent of their currency holdings in the national currency. After protests, the government relented and decreased the amount to 50 percent.
In 1991, legislation was enacted that created the nation's first stock market. By 1999, the market, known as the PFTS (the Ukrainian Broker/Dealer Association and Over-the-Counter Trading System), had 125 companies
|Exchange rates: Ukraine|
|hryvnia per US$1|
|SOURCE: CIA World Factbook 2001 [ONLINE].|
|GDP per Capita (US$)|
|SOURCE: United Nations. Human Development Report 2000; Trends in human development and per capita income.|
listed with a market value of $1.121 billion. The PFTS has an electronic trading system that is responsible for about 95 percent of all trades and investments. The PFTS is constrained by widespread public suspicion and mistrust and by inadequate trading and regulatory laws.