Ukrainian Inna leaves the only currency exchange office at the central bus station in the Polish city of Lublin with the same hryvnias (her country’s currency) with which she entered. He has fled the war to Poland – like nearly two million people since it began on February 24 – and is trying to obtain zlotys, the currency of one of the eight EU countries that has not adopted the euro. “The exchange rate was so bad that I preferred to exchange a few dollars that I had. We brought all the money we had left from Ukraine, ”she says along with her friend Natalia, who assures that, seen what has been seen, they will only change hryvnias to zlotys if they need money and it is the only thing they have left. “What we are going to do is try to get a job in Poland,” Inna interjects.
The problem affects so many people in something so basic that it has led to the intervention of the central bank and the ombudsman (the ombudsman) of Poland, Marcin Wiacek. On the one hand, because it is the country that has received 60% of the 3.2 million people (mainly women and children) who have left Ukraine for neighboring countries in just three weeks, in the fastest exodus in Europe since the end of World War II. On the other, because it already had more than a million Ukrainians (mainly economic migrants) among its 38 million inhabitants, so there are not a few refugees who choose to stay here these days, hosted by relatives, friends or acquaintances, instead of continue to richer EU countries.
The issue is worrying beyond the borders of Poland, because hundreds of thousands of Ukrainians have already arrived in countries of the euro zone. The vice president of the European Commission, Valdis Dombrovskis, said last Tuesday that he is working with the European Central Bank on “a kind of aid to convertibility, so that people can convert at least some amount of their savings into euros in hryvnias”.
Inna and Natalia found the exchange rate (10 zlotys to 100 hryvnias) abusive, but it could have been much worse. It is similar to the one that appears on the website of the Polish National Bank with an asterisk that specifies that it has been like this since February 24. On that day, the day of the beginning of the Russian invasion, the Ukrainian National Bank froze the exchange rate and suspended cross-border payments and all currency exchanges and withdrawals. “Just three days ago we were giving out four zlotys. And a week ago, two. this is the best [cambio] that we have since they began to arrive [refugiados ucranios]”, explains Slawek Sobiesiak, owner of the aforementioned exchange house in this, for many, city, scales to Warsaw by train or bus. 100 kilometers from Lublin, two other exchange houses in the vicinity of the border post between the two countries in Dorohusk offered a similar amount: nine and 9.5 zlotys. Sobiesiak estimates that 90% of the hryvnia exchanges he manages are in zlotys, 5% in euros and another 5% in dollars.
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The situation has led the Polish Ombudsman to get involved. On the 4th, it issued a statement in which it expressed its concern about the “significant difficulties” that Ukrainian refugees encountered in selling hryvnias and the “direct impact” they have “on their economic situation and dignity.” In addition, he assured that the exchange rate offered by some businesses “can be seen as a kind of usury” and that he had asked the Prime Minister, Mateusz Morawiecki, and the president of the National Bank of Poland, Adam Glapinski, for solutions.
Two Contradictory Dynamics
Piotr Arak, director of the think tank Polski Instytut Ekonomiczny (Polish Economic Institute), based in Warsaw, explains by phone that the notable presence of Ukrainian workers meant that in recent years zlotys were frequently exchanged for hryvnias in Poland, mainly as remittances. With the flood of refugees, the flow changed completely and it was time to reconcile two contradictory dynamics. One, the humanitarian need and the political gesture of helping the Ukrainian refugees. Another, that at street level neither banks nor private money changers would be pirassed to accumulate a currency with a complicated present and an uncertain future. “Already before the war, Ukraine was not a strong economy, especially after 2014 [cuando Rusia se anexionó Crimea y estalló el conflicto bélico en el Donbás]even the hryvnia did not work very well […] It is difficult for someone to want to maintain it, because nobody knows how long the war will last or what will happen to it”, he explains. Polish media have reported that in Warsaw and Krakow, the country’s two main cities, several moneychangers have so many hryvnias that they simply don’t buy any more. Photographs of queues of up to tens of meters at the entrance of exchange offices are also circulating on social networks.
The Polish National Bank has intervened to partially solve the problem, by establishing itself as a guarantor and setting an exchange rate – more beneficial than the market rate – by which Ukrainians can transfer hryvnias from banks in their country to accounts they open in banks Polish private and where they already enter as zlotys. Arak admits that the guarantee represents “a systemic risk” for the country, because “having a currency that is not exchangeable is like having a toxic asset”, but clarifies that the Ukrainian economy is small, its inhabitants do not have large amounts of money and Poland has “one of the healthiest banking systems”. He is also helping refugees as their currency depreciates and some Polish money changers are giving up the profit in order to sell hryvnias, which balances supply and demand.
the economic newspaper Puls Biznesu points this Thursday that before the end of the month the Ukrainians will be able to exchange hryvnias for zlotys at a decent rate that is being agreed with the Ukrainian side and up to a certain amount. A week earlier, Iwona Duda, president of the country’s largest bank, PKO Bank Polski, had told the newspaper Dziennik Gazeta Prawna that a special team was articulating a solution to the problem. It will be for those who have a Ukrainian passport and in accordance with the legislation against money laundering, which requires knowing personal data and the origin of the money, which goes wrong with a hasty departure, sometimes without a passport or important documents.
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