The dollar, the Euro and Ukraine’s hryvnia. What currency is more useful during a crisis?

The dollar, the Euro and Ukraine’s hryvnia. What currency is more useful during a crisis?

How do you prepare for financial shocks? The economic crises, changes in national currencies…There are problems cause modern people stress. Ukrainians make savings to have some financial stability. What currency to chose?

The Euro or american dollar?

Ukrainians chosed the US dollar as practice shows. This trend began in the early nineties and continues today. The financial crisis during the Covid-19 shows the euro can be the best alternative.

What the euro is? This currency originated almost twenty years ago and became a real challenge to the US dollar. The Europe’s economy is too similar to the United States’. That is why the Euro is one of the world’s reserve currencies.

The single European currency has been constantly rising in price since the 2000s. The dollar ‘sat down’ in the meantime. There are specific figures: the dollar against the euro was 0.86 in 2002 and the rate was 1.6 in 2008. The growth came to a halt during the 2014 debt crisis.

The central banks reserves around the world are also very significant. The share of the euro in gold and foreign exchange reserves rose from 18 to 26 percent from the 2000s to 2008. The dollar indicator decreased from 72 to 64 at the same time. What are the reasons for the euro growing popularity?

  1. The EU is economically and politically strong. It has a developed political system. Europe no worse the United States in terms of capitals and risks
  2. The trade deficit always absent in the EU. This means services and production developed in the EU
  3. The EU is not as dependent on China as the United States. The EU economy is self-sufficient. It has no distortions. It is not like between China and the USA when production in one country and finance in another.

In what currency to save?

It is very useful to use the rule “do not keep all the eggs in one basket”. Save both in hryvnia and in dollars and euros. It is useful to keep the hryvnia. It earns more on deposits than euros and dollars. Our currency has improved its position and become more stable thanks to the planned and balanced to the National Bank of Ukraine strategy.

It would be wise not to bet on only one currency. It is better to give the largest share to the European currency.

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