Germany plans to help Ukrainian refugees convert money into euros

Under the plan, the government would take on exchange rate risks from commercial lenders, which have mostly refused to exchange the Ukrainian currency since the Russian invasion of Ukraine on Feb. 24. The finance ministry is prepared to put aside up to 52.5 million euros ($56.13 million) for this purpose, a letter from a junior minister, Florian Toncar, to parliament's budget committee showed.

Germany plans to let Ukrainian refugees exchange their hryvnia currency into euros for three months, a document seen by Reuters on Tuesday showed, in a move to help those who face problems converting money at banks in the European Union. Under the plan, the government would take on exchange rate risks from commercial lenders, which have mostly refused to exchange the Ukrainian currency since the Russian invasion of Ukraine on Feb. 24.

The finance ministry is prepared to put aside up to 52.5 million euros ($56.13 million) for this purpose, a letter from a junior minister, Florian Toncar, to parliament's budget committee showed. "Since the outbreak of the war in Ukraine, the exchange of the Ukrainian national currency hryvnia has effectively come to a standstill because commercial banks fear high exchange rate losses," the letter to the committee read.

Adult refugees will be able to exchange notes with a nominal value of up to 10,000 hryvnia ($339) into euros over three months. About 360,000 refugees have fled to Germany to escape the war in Ukraine, about a third of whom are believed to be adults. The ministry expects a total of about 500,000 people.

Ukraine's central bank suspended exchanges to protect its limited foreign exchange reserves after the start of Russia's invasion. That meant EU credit institutions were unwilling to carry out exchanges of hryvnia due to the limited convertibility of banknotes and exposure to exchange rate risk. As part of its humanitarian assistance, the European Commission proposed earlier this month that Ukrainian refugees should be allowed to convert their hryvnia currency into euros up to a maximum of around 300 euros per person. 

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