Why Ukrainian refugees cannot trade their currency for Swiss francs

 

 

Switzerland has opened itself up to Ukrainians since Russia first invaded in late February, with an estimated 26,000 arriving in the country so far. 

The country created a new permit system to allow Ukrainians to stay, work and study, while thousands of families have pledged to open their homes to refugees. 

Switzerland’s reception has been so positive that some have criticised the Swiss for preferential treatment when compared to other refugee influxes. 

OPINION: Criticism of Swiss refugee response lacks perspective

Can Ukrainians exchange their currency in Switzerland? 

Those arriving in Switzerland however face a major hurdle, in that Swiss banks are not allowing them to exchange their hryvnia for francs. 

Anyone who approaches a Swiss bank or currency exchange centre anywhere in Switzerland wanting to exchange hryvnia will be rejected. 

Ukrainians can withdraw francs from Swiss ATMs from their Ukrainian accounts, whereby the currency trade will take place automatically, however those seeking to exchange cash will be restricted. 

This is particularly problematic as many Ukrainians withdrew money, sometimes large sums, before they left to prepare for the journey and for settling in at their eventual destination. 

Sasha Volkov, a representative of the Swiss Ukrainian Association, told Switzerland’s Tages Anzeiger newspaper it is a challenging an unexpected hurdle for people who have already endured significant hardships. 

“They left their belongings at home, and even large suitcases found no place in the full trains. Many only came with cash – and cannot buy anything here with it. They didn't expect that."

Why won’t Swiss banks exchange Ukrainian currency? 

The Ukrainian currency is rapidly devaluing as a consequence of the war and Swiss banks are reluctant to take on too much hryvnia as they worry it will lose value. 

In the short term, they are also unable to convert the cash due to the war. 

Switzerland's special 'S permit' visa program: What Ukrainians need to know

In normal times, they would transfer the cash to Ukraine’s central bank in Kyiv, whereby they would receive US dollars, euros or other foreign currencies. 

At present however, Ukraine’s central bank is using its foreign currency reserves to purchase medicines, food and weapons rather than exchange currency. 

Economist Fabio Canetg told Switzerland’s Tages Anzeiger newspaper “Swiss banks have legitimate doubts that they won't be able to get rid of the Ukrainian money”. 

Will this change anytime soon? 

Fortunately for Ukrainians looking to cover the costs of an expensive move to Switzerland, help may be on the way. 

The Swiss government has called upon the Swiss National Bank and the Department of Finance to find a solution. 

According to a statement, the Federal Council wants to facilitate the “exchange of a limited amount of cash per person… through selected commercial banks”. 

READ MORE: Swiss population supports expanding sanctions on Russia

The eventual proposal will mirror that of the EU, where the EU Commission wants to allow each person to exchange a maximum of 10,000 hryvnia, which is roughly 305 euros or 310 Swiss francs. 

While this amount is relatively minimal in Switzerland, Volkov said it would allow Ukrainians to buy 

“For most people, that will be a sufficient amount to cover basic expenses. People don't need much."

“Most people also get support from friends and also receive social assistance as soon as they have protection status S.”

The money would then be bought by the SNB, which would effectively decide to take a loss.

While this amount would eventually be passed on to Swiss taxpayers, the amount would be relatively small and is unlikely to see any significant opposition given the widespread support the Swiss populace has already showed towards Ukrainian refugees.